fear a housing crash due to people buying homes above asking prices with little equity. If prices drop, affordability and potential foreclosures may arise, worsened by future layoffs and rising living costs. I want to invest more than $300k, but I'm not sure on how to mitigate risk.
Consider reallocating from real estate to other reliable investments like stock, crypto or precious metals . Severe recessions offer market buying opportunities with caution, as volatility can yield short-term trading prospects. Not financial advice, but it may be wise to invest, as cash isn't ideal in this period.
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Finding financial advisors like Melissa Terri Swayne who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
For newbies, be aware that this is a grossly oversimplified scenario. For one thing, you can't get a mortgage on an investment property without at least 25% down payment. Two, it's easy to see comps for house purchase prices, but it takes a lot of research to understand the comps on rent prices. The trick is to find a place where renting is more expensive than buying, but those places are less common because of this very type of scenario. Three, you have to remember that rent number he's using is supposed to be net income, not gross. So you have to think about costs for taxes, insurance, maintenance and vacancy when you're researching investments. All that said, real estate investing is a good tool for wealth accumulation. But it isn't foolproof.
Very soon, affordable housing will no longer be affordable. So anything anyone want to do, I will advise they do it now because the prices today will look like dips tomorrow. Until the Fed clamps down even further, I think we're going to see hysteria due to rampant inflation. You can't halfway rip the band-aid off.
Home prices will come down eventually, but for now; get your money (as much as you can) out of the housing market and get into the financial markets or gold. The new mortgage rates are crazy, add to that the recession and the fact that mortgage guidelines are getting more difficult. Home prices will need to fall by a minimum of 40% (more like 50%) before the market normalizes.If you are in cross roads or need sincere advise on the best moves to take now its best you seek an independent advisor who knows about the financial markets.
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In my opinion, a housing market crash is imminent due to the high number of individuals who purchased homes above the asking price despite the low interest rates. These buyers find themselves in precarious situations as housing prices decline, leaving them without any equity. If they become unable to afford their homes, foreclosure becomes a likely outcome. Even attempting to sell would not yield any profits. This scenario is expected to impact a significant number of people, particularly in light of the anticipated surge in layoffs and the rapid increase in the cost of living
Centre around two key targets. In the first place, remain safeguarded by realising when to offer stocks to cut misfortunes and catch benefits. Second, get ready to benefit when the market turns around. I suggest you look for the direction a representative or monetary consultant.
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Rates for borrowers might be spiking. But interest on savings isn’t. Leading to record breaking profits for big banks. We don’t have a wage price spiral going on. We have a greed price spiral
I've been keeping a list. So far, I have: 1. The EU 2. Brexit 3. COVID 4. Wokeness 5. Russia 6. Global Recession 7. Immigrants 8. Lazy working class people 9. Civil services
It's not a housing market crashing! Prices that are insane is not a market! It's a bubble that should pop and go back to normal. It's crazy how we imply that these prices make any sense and shouldn't collapse
@@samthompson7568 understand the whole reason d'etre of neoliberalism. Freedom of exchange. The more money you have the more freedom you have, and the Tories have been redistributing a lot of that freedom to a minority of people/donors.
It is difficult to make exact projections for the housing market as it is still unclear how quickly or to what degree the Federal Reserve will reduce inflation and borrowing costs without having a substantial negative impact on demand from consumers for anything from houses to cars.
I recently sold my home in the Boca Grande area and am considering investing a lump sum into the stock market before the anticipated rebound, couple of folks have been discussing a potential May rally, speculating on which stocks may experience substantial growth during the festive season. Do you have any insight into which stocks these might be?
If you are new to the market, I recommend seeking professional assistance. The most effective approach to creating a well-organized portfolio is to begin with a professional who is knowledgeable about the turbulent yet profitable market.
In France, the vast majority of mortgage are fixed rate for the duration of the loan. I bought my apartment with a fixed rated for 25 years, and no matter what happened, I know exactly how much I will pay for that period.
Same in the US. What's being described for UK mortgages sounds like what are called adjustable rate mortgages in the US. Those are considered an incredibly risky mortgage here and almost no one has one.
@@mammajamma4397 thanks for the info. A canadian friend told me that Canada uses the same ajustable rate as the UK. I was assuming the US was too. Thanks for the info.
@@tabularasa7775 Well that's more in the country side - Munich and the Speckgürtel its very expensive - like London expensive, that's different, most live rental if you want to buy a place and build a house they are for one or two families, very small ground, you know like the suburbs in London - similar.
If you're a first time buyer then ultimately I don't think this will have a huge effect on you. Yes the house prices are going down, but your higher interest rates make up the difference. This really affects people with existing mortgages. They get to pay the higher mortgage interest without benefitting from the lower house prices.
A 5-10% dip does not benefit first time buyers when prices are already far too inflated and artificial to afford. A 200% dip might benefit us, at the moment we could get a mortgage on a £250k house that was £125k 13 years ago or £170k just 4 years ago, not to mention our monthly payments have gone from £500-800 on said house to £1200k now. These existing owners have probably payed off 50% for a £150k mortgage on a house worth £350k +, not that bad ultimately. Edit: You are also forgetting that wage growth (which has been non-existing on a national scale since 2008) is at its lowest in the 20-30 bracket - where most first time buyers are, making even a deposit, let alone the lifestyle adjustment to afford payments, unaffordable.
Inflation is higher than interest, so even if you have a 5% rate of savings, you're likely to be losing money. This also ignores the fact that rents and costs are going up and young people really can't save a lot of money. It depends how deep a crash is, if smalltime landlords are forced to sell up and flood the market with available properties suitable for first-time buyers, and whether lenders/govt. permit taking on large LTV mortgages (in the region of 80-90%) while interest rates and employment rates are so volatile.
@@tomtimtomtim you'd be surprised how much you can save in 10 years. Living with your parents, not going out, not going on holiday. If prices come down from 150 to 130, i can move up north and buy a real familly home, outright. Otherwise i have to work 4-5 more years, if prices remain stagnant. If they go up, i'll learn a foreign language and move to spain or italy. I refuse to participate in a rigged system.
problem is that money gets too expensive due to high inflation. People cannot buy or build houses anymore. Construction companies will go bust. People with cash will drive up rentals and drive out lower income renter. Not good at all for nobody. We need to get inflation under control (its sinking sharp over here) but it need to get back to low interest to sustain a vibrant economy.
It won’t work. Look up the cost of labour involved in building a new built. Crash will just stop developers from building houses and prolong the crisis
Prices of bricks are up, prices of windows are up, prices of every single material you need to build a house are up, a lot..... so the cost of building a house is up, a lot...... so I doubt there will be a crash, maybe a 10% further drop at worse.
Crazy that you borrow at a set rate only for a few years. In France, unless you choose otherwise for some reason, with mortgages you get a rate for the whole duration. And if rates go down you can have a bank buy out your loan from your current bank and give you a lower rate... This helps people buy even with the rates going up as you can plan and don't have to guess what the economy will look like in 5 years.
Same in the US. The interest rate on my 30 year mortgage is good for 30 years. I doubt I'll be doing a refi since I got my mortgage when rates were in the 3s, but if it ever does go to the 2s I'll be able to refi.
Exactly describing the problem here in the U.K. 2 year fixed deals are crazy but very normal here. Now it becomes clear why it isn’t a good idea. The U.K. also has huge credit card debt and very little savings. I think we’re in for a difficult decade.
Problem is people buying houses as investments rather than a home. Look at all the TV programs about fixing up to get the highest resale. Fashion and colours far more important than practical ideas to make it a better home. This has pushed up the prices to a unstable level.
The same thing is happening here in Australia. Interest rates are rising but house prices are remaining stable, or only lowering a little bit (overall). The reserve bank can increase interest rates until people begin defaulting on their homelands, however, even that won't fix the problem. Corporate profits have skyrocketed since covid began, and governments across the globe are refusing to acknowledge that most of the inflationary pressure is coming, not from wages, but excess corporate profits. I wonder why governments filled with wealthy people are ignoring this aye?
We live in a supply and demand economy.. The value of a product comes from, it's availability, the demand for the product, the amount of sale competition and the strength of the economy in that region. If we stunt the growth of small businesses, throttle the availability of goods and increase the demand for those goods, you increase the price. Immigration increases demand, building regulations and lack of available business competition throttles product availability and therefore sale competition, and when these same predatory tactics are applied to the rest of the job market, it hurts economy strength by lowering the average wage to buying power ratio. Government bonds, fractional reserve banking and US spending habits under the oil backed petrodollar are what I believe destabilises the UK currency. Keeping the skills gap high and forcing unskilled labour into the country is driving down average wages (unless you get a 5% payrise each year, inflation hurts you) and puts strain on public services and housing markets (rental properties are in higher demand). All in all I do believe it is still reversable in a lot of western nations, however it's going to take a lot for people to realize the complexity of what is happening around then and why.
no it"s not ... this crash would be only good for those that have money on hand - for the rest, yes the housing is cheaper but the money to buy it is way harder to get - and when that reverses and people will get access to the money, house prices will shoot up accordingly - to truly "solve" the affordability problem, you need to make housing less expensive while keep interest rates down
Im a young adult whose now bought. It won't be good for me. Just got a 2 year fixed, but wish I went for the security of 5. Never mind. Ill have to overpay best I can in the meantime.
So sh*t - the housing market is so rigged against first time buyers - all we can do is spend everything we have on the smallest and sh*tist place around
When my Ex partner bought her first house 2 years ago, her interest rate was 1.96% or along those lines, when she remortgaged after the 2 years, it went up to 4.3% - that increased her mortgage from £440 to about £750 a month… and thats on a house she bought for £285k WITH a down payment of £150k she inherited from her grandmother… I cannot imagine how difficult it is for the majority of people who were not as fortunate Edit - when she told me she was getting messages about remortgaging from her broker - I told her to remortgage asap as rates are only going to keep rising. Luckily she listened and was able to get on the 4.3% (or something like that) without having to leave her current 1.96% until August when it runs out.
You did your ex a huge favour! It’s weird that so few people saw this coming. I remortgaged our flat when the rate was still 0.75%, and I thought I was a bit late since it was obvious for a while already that rates would rise a lot (and they couldn’t exactly go much further down than 0.1%!!). I went for a 10 year fixed on this. With incompetents in charge of the economy I don’t expect the inflation problem to be fixed for quite a while. Rates will probably remain higher than 0.75% for most of the next decade I reckon.
My wife’s boyfriend got a mortgage 2 years ago on a ridiculously low rate. Now we’re looking to buy our own we can hardly afford it so we’re going to move in with her boyfriend now. Times are hard
An overhaul of tenants’ rights and stricter conditions for landlords is the only way to fix the housing crisis… we can’t expect university leavers with student loan debts in the thousands to be able to afford the average house price of £400k… it’s a broken system and will rip itself to pieces.
It's not the majority of landlords fault. They pass on costs the goverments and bank of England impose on them. Shit filters down the system. The higher up you are the more likely you can move out of the way and let it hit someone lower.
How about addressing the problem of mass immigration? Housing is ultimately a supply and demand issue. We can either look at the supply side and build at least 200k new houses every year (which will be cheaply made and probably need rebuilding in 20 years), paving over the entire green belt in the process, or we can look at the demand side of the equation and stop accepting net hundreds of thousands of immigrants every year who all need housing. Improving tenants rights may help the conditions for existing tenants but it isn't going to fix the overall housing crisis.
Such a headcases answer - we need less immigration.... 1) They stopped building housing before the so called 'mass migration' of the Blair years and beyond. 2) We have an ageing population who hold the electoral power but don't want to admit that we need people to replace them when they retire. We need more working age people to support this increasing group. The solutions for this range from get more people (immigration), build more housing OR accept we will be less important (in the world) and as the population age increases our standard of living will get worse. It's really not much more complicated than that, you just pick which you want to accept.
I swear, the "unsustainable growth" people are a doomsday cult with zero economic literacy. The economy's been growing exponentially for at least the last 300 years. And yes, with the current technologies there's a limit to growth but that assumes zero technological growth and zero population growth for the rest of eternity. Even with some very poor productivity growth assumptions there's enough for sustainable growth for the next few centuries at least and that's assuming no massive productivity expansion happens such as the one currently being initiated by AI in the real world. And it's not like we weren't here before, people were saying that the Earth would "run out" of food by the end of 1960s or 1970s and what happened? New technologies and expanding productivity made green revolution happen and now there's more food than ever capable of feeding a population several times larger than the current one.
@@Dendarang Are you seriously saying we should just let the population endlessly grow? You must be assuming that immigration will increase because its not projected to grow due to natural increase in the coming years deaths will outnumber births.
Amazing people keep parroting this when the actual crisis has been the multi-decade wage stagnation that is now making it impossible for people to absorb this pricing crisis.
if a crash comes, a recession comes, companies won't be able to loan to sustain development, jobs will be lost, and even if you have money aside, you'll lose your job, you will be scared to buy, you'll eat into your deposit money just to survive, and after the crisis you'll be with no deposit money and still no home, and the market will start climbing up again... so think again.
@@Ciiipp A recession is only two or more quarters of negative growth, meaning that even if an economy contracted by 0.02% over a two quarter period, it is still a recession. I don't think Armageddon quite ensues in said scenario. Yes some people lose their jobs, but it is not to a Great Depression level. Or, you could be employed in an insulated career, think public services and crucial infrastructure work, keep your job and either go for a mortgage on a cheaper (or I should say correctly, prices at the moment are based off gov-policy - help to buy and buy to let - and a lack of supply) priced house... or invest into cut price assets (stocks etc) and wait for the recovery. You do realise that during recessions is where the highest amount of wealth transfers occur between the poorest and the top 1%, those who hold cash invest heavily in cut-price assets and hold, it's exactly what happened after 2008 and the stock market crash of 2020.
I would be surprised if we didn't see something happen. Given the interest rates and the number of people up to their EYEBALLS in buy to let mortgages for holiday homes, air bnbs, etc. I think property has been seen as an almost fool proof investment for far too long. Personally, I'd like to see the crash and hopefully it would deter this greedy behaviour in the future that we see now with rental prices, etc.
The elites will buy up all the housing as people lose their homes. Then, they will rent it out at high prices. Then, they convince everyone that government must help people with the rent and housing issues. When they "help" the people by providing food, clothing, and shelter that they caused to be more scarce, they own and control the people.
I don't follow the bad for renters logic. > Overleveraged LLs will be forced out, increasing a supply of cheaper housing. > New equilibrium in pricing found with new LLs paying less monthly. > Everyone ends up paying less.
What happened in 2008 was that those at the bottom of the market (especially) ended up in negative equity. This seized up the market completely as those people could not sell. It's not like in America where you can hand the debt back and walk away, if you lose the house you keep the debt. Coupled with the staggering shortage of housing no price drop lasts, the demand is simply so high
CoolstoryBroooo a lot of people could have used the cheap rates to their advantage and literally halved their mortgage time. Instead of overpaying they borrowed more money on the cheap to buy a house that that really couldn’t afford. Add in the loans for fancy cars and holidays and they’re living a lifestyle that outstripped their earnings with interest rates at an all time low. Having lived through the collapse in the late 80’s, interest rates ramped up to over 15% it was always inevitable that the golden years would not last forever with interest rates so low. We made a plan after the 80’s crash when moving house, we set our budget and once we’d purchased we made sure that mortgage was paid off as fast as we could. We’ve two teenagers and I’ve educated them about the problems that were always going to happen with interest rates and the housing market. The majority simply don’t get how big the Ponzi scheme is.
@@witlesswonderthe2nd883 all that is well and good, but if you time it right you can accumulate a lot of wealth by buying that house you can barely afford. After all, if the house prices grow by a percentage amount then that equates to more value on a more expensive house. Even if some of those people will have to take a hit now and downsize they will probably only lose a fraction of the additional wealth they made due to ‘overspending’ they made during the 0% interest years and end up in a better place than if they were aggressively repaying a smaller mortgage.
I moved to the states when I was 16 years ago, it was a pleasant shock when I found it was normal to get a fixed rate for the duration of your mortgage ie 15-30 years fixed
That’s a heavily subsidized rate as the Fannie Mae and Freddie Mac Federally backed insurance schemes socialize the long term risk. As we saw in the 2008 financial crisis, only taxpayer funds were capable of bailout Fannie and Freddie. Who pay? Renters, the one taxpayer group who do not benefit from this subsidy.
It all started in 2008 when all that quantitative easing was pumped into property, buy-to-let explosion etc. Too many unproductive rentiers extracting wealth from the system.
You didn't even touch on the issue of supply, which is the most important variable in the UK housing market. There will never be a "crash" in housing prices because demand will always outstrip supply. Ever since Right to Buy took millions of houses out of council ownership that were never replaced, this lack of supply has filtered through to every aspect of the UK housing market, no matter the region or price.
"Very, very few people buy a property with cash on hand" Although cash buyers are at the lowest level since 2007, 28% of the houses are bought with cash. I wouldn't call it "very, very few people".
@@weirdo1060 I don't have this data, it might be buried deep in the government sheets. Although, assuming that corporations always buy with cash is wrong. First, there are tax deductions for mortgages. Second, if the corporation is going to let the property, they're most probably doing it with a mortgage: imagine you have 100 and you can buy one property cash for the whole 100 or you can buy 4 properties with a mortgage and 25 deposit each. The rent would cover the mortgage, plus give you 3-4% profit.
Every crash/collapse brings with it an equivalent market chance if you are early informed and equipped, I've seen folks amass up to $1m amid crisis, and even pull it off easily in a favorable economy. Unequivocally, the bubble/collapse is getting somebody somewhere rich
I do not disagree, there are strategies that could be put in place for solid gains regardless of economy or markt condition, but such execution are usuallv carried out by investment experts or advisors with experience since the 08' crash
FWIW, increased mortgage repayment costs for landlords do not usually get passed on to renters, contrary to what this video claims. That's because the housing market has a fixed supply (i.e: it's effectively a monopoly) and so the price is controlled almost wholly by consumer demand, not by supplier costs (in simple terms most landlords are already charging as much as the market will allow, totally independently of their costs). The much more likely effect of rising mortgage repayment costs for landlords will be landlords selling up their properties and leaving the rental market, making way for more homeowners. The housing market just does not behave like regular markets with dynamic supply.
You assume that landlords are not tucking away a sizable profit. How many places are bought without a mortgage - watch that statistic. I know of mortgageless landlords taking the opportunity to increase profits as others simply match interest rate increases - even though they didn't cut rent when the interest rates went down.
@@old_grey_cat The entire point of what I wrote is to point out that "tucking away a sizable profit" is exactly what landlords do because the market is governed by demand for rentals.
@@jsbarretto The main point, yes, but I was responding to likelihood of investor landlords leaving the rental market and would-be owner-occupiers having a better chance. I am not optimistic. The minority with one or two rentals, perhaps, and some who have overextended, but the very wealthy and huge corporations... ? Maybe they have been too greedy too, and will fall over, reducing wealth inequality. We can hope!
Housing should be homes for families not an investment opportunity for the very few. 'Homes Under The Hammer' has a lot to answer for and should be replaced by DIY programmes ! People should be prepared to improve their property over time, not always expect to move into a pristine property. The premium people pay for this stupidity is ludicrous amounting to £10,000s ! DIY is not the death trap it's invariably painted these days. Finally, who's going to pay the rent when people retire?
Renewed my five year term just couple days ago, have to pay an extra 14% on my new fixed term rate each month now. Know that isn’t even that bad compared to others but for example if I dropped to a tracker / SVR not a fixed term my payment would have increased by 59%. Thanks UK gov.
It means that the common people can now leave their parents' house and have a house of their own without having to sell both kidneys, liver and soul... to have a house of their own.
Dork Angel cheap interest rates matched with people over borrowing have caused this problem, interest rates at the usual 6-8% would have helped keep the market steadier.
@@witlesswonderthe2nd883 Interest rates around 6% didn't stop the house prices rise from 1995 to 2007. Higher interest rates just move more money from ordinary people to the financial institutions. Not replacing the cheap housing stock sold off by the Tories caused this problem.
will be interesting to see what happens. i do feel like we have to pay the bill eventually so to speak. there have been so many bandaid fixes to try to kick the can down the road but eventually we'll need to deal with the market correcting itself.
@@davidmcculloch8490 The Tories are allergic to any form of market regulation. They'd rather watch the country burn than intervene in the business of their banking buddies.
@@davidmcculloch8490 I expect the latter. They will intervene to prevent a crash. Probably by printing a few trillion pounds and gifting them to landlords.
@@thewhitefalcon8539 In a sense we are both right. They will only intervene when the financial sector is in trouble. Yet fail to intervene to make the system work better for society - other than the 1% of course.
@@davidmcculloch8490 it’s not about trusting the market. The market doesn’t care if you trust it or not. We’ve been continually intervening because we don’t like what the market is doing but we’re not making the problem go away it’s just changing form.
My rent was £330 per month just for a one bedroom flat,Now gone up to £480 per month,Just to keep the roof over my head,Hate to think of what the future be coming too
@@diesel92kj1 not really just last june i called into barclays and it was around 2.7% and its expected to go higher, in a year or 2 interest rates could hit around 8%
Any dip of 10%+ will just get quickly eaten up by cash buying generational wealthers and foreign investments. Also even with technical affordability down, wage inflation means people can actually borrow more than ever before.. when interest rates start to come down house prices will go parabolic again.
That's exactly what happened in Australia. Where some were anticipating a 40% fall in house prices, they stablised and started rising again instead off the back of cash purchases and people fleeing an incredibly tight rental market. Seems like a lot of that is being repeated in the UK.
Wage inflation. What bloody wage inflation? The wage inflation that hasn't existed for over a decade? Prices go up, wages don't move, that's life in Britain.
To summarise, if interest rates go up, housing prices go down. Inflation is irrelevant, and wage price spirals only exist in economist's textbooks. It's BoE interest rate hikes that are driving down house prices. Just like every real estate market, British housing prices are dictated by how much prospective buyers can borrow. There is a housing shortage, you see, so people will pay whatever they can in hopes of being the highest bidder. Higher interest rates mean lower borrowing capacity, which directly translates to lower housing prices because that's all prospective buyers can afford. Now conventional wisdom has it that if inflation is high, you must raise interest rates. This theoretically limits both investment and consumption due to a lack of financing, which means lower demands, which theoretically translates to lower prices, ergo lower inflation. But inflation can have several causes, and overspending is only one of them. Another potential cause is expensive imports, which are unaffected by BoE interest rates. Conventional wisdom has it that higher interest rates attract foreign capital, which should improve exchange rates, which in turn drives down the cost of imports. But guess what? It also increases the price of your exports. This in turn exacerbates economic woes and leads to businesses ramping down their activities, resulting in layoffs. The unemployed will not get a mortgage, which means prospective home buyers can get away with lower offers. It would be better if people would stop yapping about the mythical wage price spiral, and the BoE would take it down a notch with the interest rate hikes.
There is no housing shortage. There is rent speculation, wage stagnation and unchecked inflation. The houses are all there, but the people don't have the money or economic security to have them.
I disagree. If interest rates go up, spending goes down. This often triggers recession type environments and desperate people accept lower incomes and house prices when selling. This ends income growth and reduces housewife growth, often also house price deflation. But the recession is needed first, otherwise people can afford to just pay a bit more in their mortgage and go on one less holiday a year. This plan doesn't work when there's not enough housing for everyone close to their place of work. There's nowhere to go. When houses turn to flats people then resort to homeshares or leaving the area for good
@@KyrieFortune no, there is, in large towns housing shortages. I work closely with councils. They're moving people out to different towns because they have no stock and cannot rent in their Borough because the buildings aren't there, so they rent for people in other boroughs.
I'm a homeowner with no intention of selling up, so house prices are pretty much irrelevant to me. But inflation is very much relevant - I am not liking to have to pay more for exactly the same thing, and it is not easy for me to get a pay rise to help pay the extra. I can't go on strike and finding a better paid job is not easy. And would I want a new job in a company I don't know well? It might fail if there's a recession.
Even with an 80k deposit. I literally can’t afford to pay a mortgage. If I want too buy a house in my area 2 bed is 300k. I would literally have too suffer every month too pay it. Then on top of that the worry off interest rates going up higher and losing my deposit. It’s just not worth it at all.
Those who were willing to go into debt were given a free ride with cheap money for ten years. Those who were prudent were penalised for saving for the same period. About time the tables were turned.
My greatest concern is how to recover from all these economic and global troubles and stay afloat especially with the political power tussle going on in US.
Stocks are pretty unstable at the moment, but if you do the right math, you should be just fine. Bloomberg and other finance media have been recording cases of folks gaining over 250k just in a matter of weeks/couple months, so I think there are a lot of wealth transfer in this downtime if you know where to look.
Such market uncertainties are the reason I don’t base my market judgements and decisions on rumors and here says, got the best of me 2020 and had me holding worthless position in the market, I had to revamp my entire portfolio through the aid of an advisor, before I started seeing any significant results happens in my portfolio, been using the same advisor and I’ve scaled up 750k within 2 years, whether a bullish or down market, both makes for good profit, it all depends on where you’re looking.
Having a counselor is essential for portfolio diversification. My advisor is "JACKSON STEN MARSH. who is easily searchable and has extensive knowledge of the financial markets.
If the government implemented more wide-ranging windfall taxes I imagine we'd see consumer inflation fall, so many sectors have used the Russian invasion to price gouge and the Government is happy to let them.
Windfall taxes would would not bring down prices as the companies would just use it yet more price rises. You would need to introduce price controls and penalise anti-competition measures such as landlord collusion on rental prices.
The five well-wishes of little Rishi were never to be achieved. But the lack of incentive within the government to regulate against another financial crash is even more despairing.
Yes but they are a totally homogeneous nation that’s takes very little immigration, so as elderly die off and children have fewer kids demand falls and houses become cheaper . In the uk we have mass immigration of 1.2 million people with 600,000 adding to the housing demand every year in already the 7th most populated country in the world , notice an Adam Smith ‘Demand and Supply ‘ coincidence?
I friggin hope so. Based on the average wage. A 2 bed semi detatched in the south shouldn't be more than 250k. In the north, 130-150k. A two bed terrace with a 4m² garden shouldn't be more than 150k in the south. Or 100k in the north. People need the bottom rungs of the ladder, to be affordable for individuals.
People need better wages. The cost to build the units you're talking about cost more than you've referenced. Yes land value is ridiculous but you forget cost of materials and labour
@@steph6109 Newbuild houses are overpriced and shit quallity. My nan was looking at a reletively newbuild flat to rent (Built in early 2010's) and the internal walls were hollow. Utter shit at keeping out noise compared to the current 100+ year old terraced house were living in now.
Stocks are pretty unstable at the moment, but if you do the right math, you should be just fine. Bloomberg and other finance media have been recording cases of folks gaining over 250k just in a matter of weeks/couple months, so I think there are alot of wealth transfer in this downtime if you know where to look.
@PeterWhite7 Such market uncertainties are the reason I don’t base my market judgements and decisions on rumours and here-says, got the best of me 2020 and had me holding worthless position in the market, I had to revamp my entire portfolio through the aid of an advisor, before I started seeing any significant results happens in my portfolio, been using the same advisor and I’ve scaled up 750k within 2 years,
@PeterWhite7 Having a counselor is essential for portfolio diversification. My advisor ASHLEY AIRAGAHI who is easily searchable and has extensive knowledge of the financial markets.
There’s already a housing crisis - average working people are being forced to sell up or have had their rents put up by their landlords and can’t afford to live in average locations like Milton Keynes.
It's impossible got anyone to get onto the ladder now. I was lucky enough to use help to buy in 2014, and then buy in with my partner. How can anyone afford this now?
The UK is little different, when we look at supply and demand the UK is a microclimate; houses are supported by shortage of homes and growing demand. Time will tell. 2008 we saw a dramatic fall in prices in the UK, which recovered and then boomed less than 12 months later.
Wages amount to less than 20% of inflation. The biggest predictor by far is corporate greed. Stop trying to shift blame to workers instead of greedy corpocrats.
Price hikes due to business noticing the supply chain crisis has make it hard for competition to be able to erode their precious market share. This is a business competitiveness crisis in essence. Without proper competition, capitalism degenerate into a robber barons' game.
Barbaric country still using ARMs for regular homeowners. smh. On this side of the pond, we have a lovely innovation called a 30-year fixed rate mortgage; y’all should check it out!
Unless the good houses sit there for months, then house prices aren't going/won't go down. In the area I'm interested in, the good ones are still only staying up for a week or so and there are still heated offers being placed on these, whereas others have been sitting there for months with reductions. I think the market will polarise where the good houses will go up in price and the bad ones go down. People's resolve is just too high to be deterred: they'll sacrifice everything and just pay a higher mortgage. The last few years have started in motion a chain of events when it comes to housing and I don't think it's suddenly going to stop.
House Market can't crash, Price can just drop a bit. People will always want to buy a house. People have to leave somewhere. Be it renting it or buying it.
Yes I would like to know this too. It makes it sound like there’s no way to break the cycle. A lot of us watching your channel are not economists and this section was misleading.
I know people who bought their house between 8 and 14 years ago and and the prices went up they borrowed money on the higher valuation of their property and got even deeper in debt so it is their own fault they are struggling now, some people will borrow as much as they can and when they cannot afford to pay it back it is always someone else's fault they are in so much debt, really?
This bubble started under the Labour government back in the late 90's and has been repeatedly reinflated whenever it should have fallen. Its going to he a fun ride and fortunately I made it my business to pay off my mortgage over the last 10 years.
We spoke to a financial advisor last week for a remortgage; in the space of 6 days, the monthly repayments have gone up £30 because the banks are pulling products left and right. We dread to think what Thursday 22nd June is going to bring when the base rate goes up. Signing paperwork tomorrow to protect ourselves (a bit). We didn't borrow the full amount we could, and have no other debt... Yet we have just sat down to see where we can further trim the (already lean) household budget.
Because all the landlord in the U.K. and the seabed, is owned by the crown. We are just competing in terms of who gets to live on it. (Homeowners own the house, the royals own the land).
Not sure I would categorise stabilising house prices a fix really. It's more keeping things broken. Appreciate the problems a price correction will cause.
The story at the beginning about interest rates and core inflation is something I hope the Bank of England doesn't believe because it is missing so much. It takes at least 12 months for interest rates to have a widespread impact on the economy, so only now should we expect to see them bringing down inflation. 1 year ago, UK interest rates were 1.25% so it is hardly surprising that inflation is still high. Much of the recent inflation is due to energy prices, these have a knock on effect across the whole economy too, as with interest rates this effect is delayed. This explains why core inflation is still high. Ramping up interest rates fast and high just means you are going to overshoot massively and start a recession. So yes, house prices will crash, unless the government spend a lot of money propping it up. Recession too.
If you look at the land registry HPI, (whose data is amounts houses have actually sold for, not best-guess-for-the-advert), property prices for the entire country rose 4.1%, which is a little different to the listed graph’s drop of between 1 and 2 percent.
@@philthompson2239 yes because it’s fact. It’s actual completed sales. It’s the old trade-off between speed and accuracy. Plus, if you look at my comment, it proves my point. The bank graph showed house prices (of one bank) dropping, in the same month when prices were rising sharply.
@@c_n_b true, but they don’t go on record at that point. The handshake happens, then later when the funds have been transferred and the land registry records the sale, (anywhere up to six months later), then it becomes data.
Make No Mistake, House prices going down is a good thing, they have been way to high for way to long. It's going to be long painful road though, because it was left to spiral into the crisis it is today, people will be stuck in their current homes for years before they can sell or move. It has to happen though, and we need a government that properly regulates the market, encourages building of new stock and better use of the current stock. If someone buys a home and nobody lives there for 3 years, the house should be repossessed regardless and sold onto someone who actually wants a home. Soo many policies could be implemented to stop this from happening again.
Unfortunately middle class wealth has been mostly accured through home owning so in a crash they'll lose out while the wealthy yet again hoover up the assets and make them scarcer and can afford to just sit on properties unless we put mechanisms in place that make profiteering on housing unattractive 😢
We had a 5 year which finished last month. We were on about £898 a month is now 4.1% and about £1100. Luckily my student loan ended and I'm £183 a month better off! The world gives the world takes. No idea what we'd do if we were younger and facing £500+ more a month. Sad.
Honestly my generation is so screwed. I’ve been lucky and able to afford to take out a mortgage on a house. However I did this when mortgage rates were low and I’m now looking at a ~£400 increase. I’m on a plan 2 student loan so there’s a few hundred pound chuck going towards that every month, yet the balance is still increasing due to interest. Ironically maybe those who have been unable to afford a house will be better off in the coming years.
@@ondene5748 sorry to hear that! How old are you? I'm 40 so my debt was like 10k leaving uni, I hear folks these days are leaving more like 40k to 50k! If you have not had kids yet... wait till you see how much nursery is!
Ive been hoping for a house price crash for over 20 years. When you realise property is huge part of the rich and powerfulls storage of wealth you also realise the rich and powerfull will do everything to prevent it.
It's not even the 'rich and powerful'. Normal working class people owning houses would be screwed by a huge drop in prices. We need a leveling out, not a crash.
@@llanieliowe794 stop being delusional. you won't be able to get a mortgage if you are on a lower wage and/or are not employed by a big time employer, no banks will take you when the interest rate is so high or the market crushing. working class only benefits when everything goes well and eveyone gets a piece, as soon as it becomes cut throat, nothing will trickle down anymore and the less fortunate will always be the first to fall. even if you start a revolution, the most likely outcome for you is that you take all the risks and do all the work for someone else to claim the result, you'll still end up with nothing and you lose what you already have.
This interest rate madness has caused my landlord to need to sell as their mortgage doubled overnight, and me to need to get a deposit together in 2 months so i can move. This is going to be a common thing. So less houses to rent and more houses on the market for sale, and higher interest rates for mortgages. This is currently bad for a lot of people, will get worse, and is happening during a cost of living crisis. This is nuts, but house prices have to crash to balance this if the Internet rate stays so high.
Housing crash won't balance anything. People who can't afford their current mortgage will down size, landlords will sell to bigger landlords for cash. What this will do is trigger a recession. Employees will move employers will have to close or downsize their businesses and everyone left will have less money to spend. We're going to have a deep recession. Its an awful thing.
@@Anne-ku3lj I looked at that and I am about 50k short of being able to buy. Was a good chance to learn more about mortgages and buying houses though, so I will be better prepared in the future.
@19:14 I just want to correct you. Rising rates will not cripple home owners, they do not have mortgages. Mortgage holders own nothing until the last payment has been made, they are not homeowners.
Some people are loving money too much, which is causing this escalation in prices and rent.Even if anyone just wants a simple life they are caught up in this ever increasing cycle of price hikes and forced to go along with market rates.
I'm not really sure I feel bad about the potential crash. Yes, those that bought a property to rent it out will be affected. And badly. And those that are renting were and are affected. Badly. But the renters will have to endure some time of discomfort and after the crash, will live better, due to the crash. The only negative will be for the landlords. Considering they have caused the property shortage in the first place, not sure I really feel bad for them. So bring it on!
This will trigger a recession. Maybe that's the goverments aim to stop wage-price inflation anyway. No point having a deposit when you have no job and 10% interest rates.
A market crash is bad for renters, but if the cost of a mortgage goes up, it creates downward pressure on owning a home. Renters will exit the market and go to apartment complexes which are built to be rent. The average price will go up, but it won't be enough to counter the increased costs of those who buy to rent a home. This means those who treat real estate as an investment will be reminded that the line doesn't always go up. Many of these home will become unprofitable to attempt to rent, reducing demand to own a house, dropping prices down to a level where more can buy a house. Having homes for rent isn't always bad, but when there's an entire market buying homes just to rent them it's an unsustainable market.
It'll do good for me as I'm waiting for prices to drop to buy a house. (I have owned before but had to sell due to a break up). However it won't be good for sellers, because if prices drop too much, it'll leave them in negativity equity, meaning they physically can't sell their homes. Meaning those homes won't be put into the market for buyers to purchase. Would you want to pay £20k to sell your own home? Could you pay £20k to sell your own home? That's the reality facing sellers in the coming months. It means no houses for us to buy.
What surprises me is how banks are still lending such a high income multiplier despite raising interest rates, I'm surprised that hasn't fallen in which case I can actually see house prices *crash*, until then I can only see a slow puncher effect or even a raise since we're out immigrating our house building.
this is the only sensible comment. House rprices have nothing really to do with supply and demand. What really governs the price of a house is availablity of credit. If sellers (either indivdually or cuturally) know that a bank will lend 7 times a salary, then prices will reflect that. And it's not even the banks money, they will get bailed out - so they don't care, it's not the buyers money - they don't care what it costs they ony care about the next repayment. And the the seller doesn't care because they usually just recycle it back into a nother property.
M. Khan interest rates normally sit between 6-8%, they’ve been kept artificially low since the 2008 crash. I lived and payed a mortgage through paying 15% plus in the 80’s. The rates were low and always had to correct themselves, I’m just surprised they spent as long kicking the can down the road, anyone with any sense could see it coming.
Man if only someone had said that the government printing an endless amount of money was a bad thing. But both the conservatives and labour are promising more of the same.
The economy is currently unsustainable. There are too many taking too much at the top. Corporate greed has caused this situation and there is just not enough money to go round anymore
Normally it would be bad for renters, but in this instance it is good for the renters. The government is changing eviction policy and the abilty to charge outlandish rents or rent increases.
Rishi Sunak amending his To-Do list: "Hmm. Halve the inflation? More like "halve the economy". Grow the economy? I like "Grow profit" more. Reduce debt? *crosses out* "Cut the NHS waiting lists? *erases 'waiting lists* Stop small boats. To be continued ..."
fear a housing crash due to people buying homes above asking prices with little equity. If prices drop, affordability and potential foreclosures may arise, worsened by future layoffs and rising living costs. I want to invest more than $300k, but I'm not sure on how to mitigate risk.
Consider reallocating from real estate to other reliable investments like stock, crypto or precious metals . Severe recessions offer market buying opportunities with caution, as volatility can yield short-term trading prospects. Not financial advice, but it may be wise to invest, as cash isn't ideal in this period.
It's often true that people underestimate the importance of financial advisors until they feel the negative effects of emotional decision-making. I remember a few summers ago, after a tough divorce, when I needed a boost for my struggling business. I researched and found a licensed advisor who diligently helped grow my reserves despite inflation. Consequently, my reserves increased from $275k to around $750k.
nice! once you hit a big milestone, the next comes easier.. who is your advisor please, if you don't mind me asking?
Finding financial advisors like Melissa Terri Swayne who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
For newbies, be aware that this is a grossly oversimplified scenario. For one thing, you can't get a mortgage on an investment property without at least 25% down payment. Two, it's easy to see comps for house purchase prices, but it takes a lot of research to understand the comps on rent prices. The trick is to find a place where renting is more expensive than buying, but those places are less common because of this very type of scenario. Three, you have to remember that rent number he's using is supposed to be net income, not gross. So you have to think about costs for taxes, insurance, maintenance and vacancy when you're researching investments. All that said, real estate investing is a good tool for wealth accumulation. But it isn't foolproof.
Very soon, affordable housing will no longer be affordable. So anything anyone want to do, I will advise they do it now because the prices today will look like dips tomorrow. Until the Fed clamps down even further, I think we're going to see hysteria due to rampant inflation. You can't halfway rip the band-aid off.
Home prices will come down eventually, but for now; get your money (as much as you can) out of the housing market and get into the financial markets or gold. The new mortgage rates are crazy, add to that the recession and the fact that mortgage guidelines are getting more difficult. Home prices will need to fall by a minimum of 40% (more like 50%) before the market normalizes.If you are in cross roads or need sincere advise on the best moves to take now its best you seek an independent advisor who knows about the financial markets.
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In my opinion, a housing market crash is imminent due to the high number of individuals who purchased homes above the asking price despite the low interest rates. These buyers find themselves in precarious situations as housing prices decline, leaving them without any equity. If they become unable to afford their homes, foreclosure becomes a likely outcome. Even attempting to sell would not yield any profits. This scenario is expected to impact a significant number of people, particularly in light of the anticipated surge in layoffs and the rapid increase in the cost of living
Centre around two key targets. In the first place, remain safeguarded by realising when to offer stocks to cut misfortunes and catch benefits. Second, get ready to benefit when the market turns around. I suggest you look for the direction a representative or monetary consultant.
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Rates for borrowers might be spiking. But interest on savings isn’t. Leading to record breaking profits for big banks. We don’t have a wage price spiral going on. We have a greed price spiral
Your talking about it like it's new, you just got to the age of 8 or something?
interest savings don't increase as inflation rises, that's counterintuitive
Uneducated?
Why dont you sell everything you own and take all the debt you could possibly borrow and own 'the banks' then?
TLDR needs to stop peddling the wage price spiral bullshit
Shame, they use to be able to blame the EU for everything 😂😂😂
now thry blamr brexit.
@@rizkyadiyanto7922 Do they?
I've been keeping a list. So far, I have:
1. The EU
2. Brexit
3. COVID
4. Wokeness
5. Russia
6. Global Recession
7. Immigrants
8. Lazy working class people
9. Civil services
@@me0101001000 you've missed off The Blob
Just like some people blame Brexit for everything now...
It's not a housing market crashing! Prices that are insane is not a market! It's a bubble that should pop and go back to normal. It's crazy how we imply that these prices make any sense and shouldn't collapse
I personally hope they collapse they make it out like it's a really bad thing in this video but for the working class it's actually a relief.
@@llanieliowe794lol. Then only fat cats will benefit from it.
The problem is the millions who’ve bought those properties at those prices.
@@DTL0VER most of the people bought the houses a decade -or more- back and they have a already made more than double
@@Speedkam are you calling working class fat cats?
these guys have done so much damage to the UK
The other parties won't fix it either. Don't trust them
@@NeoWish maybe, but can't be much worse than the economically illiterate Tories.
@@samthompson7568 power of hindsight
And you'll get the exact same with Keir Starmer.
@@samthompson7568 understand the whole reason d'etre of neoliberalism.
Freedom of exchange. The more money you have the more freedom you have, and the Tories have been redistributing a lot of that freedom to a minority of people/donors.
It is difficult to make exact projections for the housing market as it is still unclear how quickly or to what degree the Federal Reserve will reduce inflation and borrowing costs without having a substantial negative impact on demand from consumers for anything from houses to cars.
I recently sold my home in the Boca Grande area and am considering investing a lump sum into the stock market before the anticipated rebound, couple of folks have been discussing a potential May rally, speculating on which stocks may experience substantial growth during the festive season. Do you have any insight into which stocks these might be?
If you are new to the market, I recommend seeking professional assistance. The most effective approach to creating a well-organized portfolio is to begin with a professional who is knowledgeable about the turbulent yet profitable market.
@RobertCooper03 I'm intrigued by your experience. Could you possibly recommend a trustworthy advisor you've consulted with?
They talk a lot about wage-price spirals, but we are firmly in the middle of a profit-price spiral and their masters won't allow them to say it.
In France, the vast majority of mortgage are fixed rate for the duration of the loan. I bought my apartment with a fixed rated for 25 years, and no matter what happened, I know exactly how much I will pay for that period.
Same in Germany, standard is 10 years and the longer you fix it a bit more expensive it gets
Same in the US. What's being described for UK mortgages sounds like what are called adjustable rate mortgages in the US. Those are considered an incredibly risky mortgage here and almost no one has one.
@@mammajamma4397 thanks for the info. A canadian friend told me that Canada uses the same ajustable rate as the UK. I was assuming the US was too. Thanks for the info.
@@Bb13190 To quote pop culture "its a trap" run!
@@tabularasa7775 Well that's more in the country side - Munich and the Speckgürtel its very expensive - like London expensive, that's different, most live rental if you want to buy a place and build a house they are for one or two families, very small ground, you know like the suburbs in London - similar.
"Truss Era"? , was it long enough to be considered an era ?
Surely it’s a Truss Error!
It was more like Truss interruption.
The Truss blip
intermission
@@hockysa Intrussmission!
I dunno but i feel like calling it the Truss "era" is a bit of a stretch...
How about truss month
If you're a first time buyer then ultimately I don't think this will have a huge effect on you. Yes the house prices are going down, but your higher interest rates make up the difference. This really affects people with existing mortgages. They get to pay the higher mortgage interest without benefitting from the lower house prices.
A 5-10% dip does not benefit first time buyers when prices are already far too inflated and artificial to afford. A 200% dip might benefit us, at the moment we could get a mortgage on a £250k house that was £125k 13 years ago or £170k just 4 years ago, not to mention our monthly payments have gone from £500-800 on said house to £1200k now. These existing owners have probably payed off 50% for a £150k mortgage on a house worth £350k +, not that bad ultimately.
Edit: You are also forgetting that wage growth (which has been non-existing on a national scale since 2008) is at its lowest in the 20-30 bracket - where most first time buyers are, making even a deposit, let alone the lifestyle adjustment to afford payments, unaffordable.
Inflation is higher than interest, so even if you have a 5% rate of savings, you're likely to be losing money. This also ignores the fact that rents and costs are going up and young people really can't save a lot of money.
It depends how deep a crash is, if smalltime landlords are forced to sell up and flood the market with available properties suitable for first-time buyers, and whether lenders/govt. permit taking on large LTV mortgages (in the region of 80-90%) while interest rates and employment rates are so volatile.
It's good for the millions of 30 year olds living with their parents, to save a deposit.
@@Hession0Drasha ..not really affordability remains the same borrowing limits will be lowered to manage risk.
@@tomtimtomtim you'd be surprised how much you can save in 10 years. Living with your parents, not going out, not going on holiday. If prices come down from 150 to 130, i can move up north and buy a real familly home, outright. Otherwise i have to work 4-5 more years, if prices remain stagnant. If they go up, i'll learn a foreign language and move to spain or italy. I refuse to participate in a rigged system.
They needs to be a massive correction. Houses are homes
How many lives would a correction ruin
problem is that money gets too expensive due to high inflation. People cannot buy or build houses anymore. Construction companies will go bust. People with cash will drive up rentals and drive out lower income renter. Not good at all for nobody. We need to get inflation under control (its sinking sharp over here) but it need to get back to low interest to sustain a vibrant economy.
It won’t work. Look up the cost of labour involved in building a new built. Crash will just stop developers from building houses and prolong the crisis
@@bavariancarenthusiast2722 No one asked
@@keiranokeeffe6682lives of people who own more than 1 house?
Prices of bricks are up, prices of windows are up, prices of every single material you need to build a house are up, a lot..... so the cost of building a house is up, a lot...... so I doubt there will be a crash, maybe a 10% further drop at worse.
Crazy that you borrow at a set rate only for a few years. In France, unless you choose otherwise for some reason, with mortgages you get a rate for the whole duration. And if rates go down you can have a bank buy out your loan from your current bank and give you a lower rate... This helps people buy even with the rates going up as you can plan and don't have to guess what the economy will look like in 5 years.
Brits are clever than French, that’s the reason.
Same in the US. The interest rate on my 30 year mortgage is good for 30 years. I doubt I'll be doing a refi since I got my mortgage when rates were in the 3s, but if it ever does go to the 2s I'll be able to refi.
@@esemredemir Which is why we are paying through our nose for mortgages and rent. Quit the exceptionalism nonsense
@@blazzz13 I was critical of exceptionalism 😁
Exactly describing the problem here in the U.K. 2 year fixed deals are crazy but very normal here. Now it becomes clear why it isn’t a good idea. The U.K. also has huge credit card debt and very little savings. I think we’re in for a difficult decade.
Problem is people buying houses as investments rather than a home. Look at all the TV programs about fixing up to get the highest resale. Fashion and colours far more important than practical ideas to make it a better home. This has pushed up the prices to a unstable level.
The same thing is happening here in Australia. Interest rates are rising but house prices are remaining stable, or only lowering a little bit (overall). The reserve bank can increase interest rates until people begin defaulting on their homelands, however, even that won't fix the problem. Corporate profits have skyrocketed since covid began, and governments across the globe are refusing to acknowledge that most of the inflationary pressure is coming, not from wages, but excess corporate profits. I wonder why governments filled with wealthy people are ignoring this aye?
We live in a supply and demand economy.. The value of a product comes from, it's availability, the demand for the product, the amount of sale competition and the strength of the economy in that region. If we stunt the growth of small businesses, throttle the availability of goods and increase the demand for those goods, you increase the price.
Immigration increases demand, building regulations and lack of available business competition throttles product availability and therefore sale competition, and when these same predatory tactics are applied to the rest of the job market, it hurts economy strength by lowering the average wage to buying power ratio.
Government bonds, fractional reserve banking and US spending habits under the oil backed petrodollar are what I believe destabilises the UK currency. Keeping the skills gap high and forcing unskilled labour into the country is driving down average wages (unless you get a 5% payrise each year, inflation hurts you) and puts strain on public services and housing markets (rental properties are in higher demand).
All in all I do believe it is still reversable in a lot of western nations, however it's going to take a lot for people to realize the complexity of what is happening around then and why.
As a young adult a housing crash is a good thing. Hopefully there is a chance I can afford 1 in like 100 years
:-( ... Inheritance?
🤦♀
no it"s not ... this crash would be only good for those that have money on hand - for the rest, yes the housing is cheaper but the money to buy it is way harder to get - and when that reverses and people will get access to the money, house prices will shoot up accordingly - to truly "solve" the affordability problem, you need to make housing less expensive while keep interest rates down
Im a young adult whose now bought. It won't be good for me. Just got a 2 year fixed, but wish I went for the security of 5. Never mind. Ill have to overpay best I can in the meantime.
So sh*t - the housing market is so rigged against first time buyers - all we can do is spend everything we have on the smallest and sh*tist place around
When my Ex partner bought her first house 2 years ago, her interest rate was 1.96% or along those lines, when she remortgaged after the 2 years, it went up to 4.3% - that increased her mortgage from £440 to about £750 a month… and thats on a house she bought for £285k WITH a down payment of £150k she inherited from her grandmother… I cannot imagine how difficult it is for the majority of people who were not as fortunate
Edit - when she told me she was getting messages about remortgaging from her broker - I told her to remortgage asap as rates are only going to keep rising. Luckily she listened and was able to get on the 4.3% (or something like that) without having to leave her current 1.96% until August when it runs out.
You did your ex a huge favour! It’s weird that so few people saw this coming. I remortgaged our flat when the rate was still 0.75%, and I thought I was a bit late since it was obvious for a while already that rates would rise a lot (and they couldn’t exactly go much further down than 0.1%!!). I went for a 10 year fixed on this. With incompetents in charge of the economy I don’t expect the inflation problem to be fixed for quite a while. Rates will probably remain higher than 0.75% for most of the next decade I reckon.
My wife’s boyfriend got a mortgage 2 years ago on a ridiculously low rate. Now we’re looking to buy our own we can hardly afford it so we’re going to move in with her boyfriend now. Times are hard
Bro you got bigger problems 😂
@@Karma1st 🥲🥲 you’re telling me! Hopefully the rates drop
You cannot possibly KNOW what future rates will be, it is all guess work
An overhaul of tenants’ rights and stricter conditions for landlords is the only way to fix the housing crisis… we can’t expect university leavers with student loan debts in the thousands to be able to afford the average house price of £400k… it’s a broken system and will rip itself to pieces.
It's not the majority of landlords fault. They pass on costs the goverments and bank of England impose on them.
Shit filters down the system. The higher up you are the more likely you can move out of the way and let it hit someone lower.
How about addressing the problem of mass immigration? Housing is ultimately a supply and demand issue. We can either look at the supply side and build at least 200k new houses every year (which will be cheaply made and probably need rebuilding in 20 years), paving over the entire green belt in the process, or we can look at the demand side of the equation and stop accepting net hundreds of thousands of immigrants every year who all need housing. Improving tenants rights may help the conditions for existing tenants but it isn't going to fix the overall housing crisis.
Did you know landlords pay 20% of profits to HRMC? Some pay 40%. Government will not impact this easy money making channel
@@harambae7014 You want to kick out immigrants instead of doing the work to fix the problems.
Such a headcases answer - we need less immigration....
1) They stopped building housing before the so called 'mass migration' of the Blair years and beyond.
2) We have an ageing population who hold the electoral power but don't want to admit that we need people to replace them when they retire. We need more working age people to support this increasing group.
The solutions for this range from get more people (immigration), build more housing OR accept we will be less important (in the world) and as the population age increases our standard of living will get worse. It's really not much more complicated than that, you just pick which you want to accept.
Hang on, are you saying that continuous exponential growth is unsustainable long term?!
That was never the case - life is in cycles also economies.
I swear, the "unsustainable growth" people are a doomsday cult with zero economic literacy. The economy's been growing exponentially for at least the last 300 years. And yes, with the current technologies there's a limit to growth but that assumes zero technological growth and zero population growth for the rest of eternity. Even with some very poor productivity growth assumptions there's enough for sustainable growth for the next few centuries at least and that's assuming no massive productivity expansion happens such as the one currently being initiated by AI in the real world. And it's not like we weren't here before, people were saying that the Earth would "run out" of food by the end of 1960s or 1970s and what happened? New technologies and expanding productivity made green revolution happen and now there's more food than ever capable of feeding a population several times larger than the current one.
It depends, it's debt driven growth or not
@@Dendarang Are you seriously saying we should just let the population endlessly grow? You must be assuming that immigration will increase because its not projected to grow due to natural increase in the coming years deaths will outnumber births.
Tldr, say it with me.
The wage price spiral is not a thing!
Amazing people keep parroting this when the actual crisis has been the multi-decade wage stagnation that is now making it impossible for people to absorb this pricing crisis.
To stop the wage price spiral, they decide to just not let the wages rise, of course they put the burden of the problem on the common folk
Time to address the Dividend/executive salary price spiral
@@old_grey_cat Stock buyback/stock option price spiral if you will.
Now if they could fall to a sensible level im all for a crash.
if a crash comes, a recession comes, companies won't be able to loan to sustain development, jobs will be lost, and even if you have money aside, you'll lose your job, you will be scared to buy, you'll eat into your deposit money just to survive, and after the crisis you'll be with no deposit money and still no home, and the market will start climbing up again... so think again.
@@Ciiipp A recession is only two or more quarters of negative growth, meaning that even if an economy contracted by 0.02% over a two quarter period, it is still a recession. I don't think Armageddon quite ensues in said scenario. Yes some people lose their jobs, but it is not to a Great Depression level. Or, you could be employed in an insulated career, think public services and crucial infrastructure work, keep your job and either go for a mortgage on a cheaper (or I should say correctly, prices at the moment are based off gov-policy - help to buy and buy to let - and a lack of supply) priced house... or invest into cut price assets (stocks etc) and wait for the recovery. You do realise that during recessions is where the highest amount of wealth transfers occur between the poorest and the top 1%, those who hold cash invest heavily in cut-price assets and hold, it's exactly what happened after 2008 and the stock market crash of 2020.
@@Ciiipp "If the housing market crashes, trickle down economics won't work!"
Trickle down economics never worked.
I would be surprised if we didn't see something happen. Given the interest rates and the number of people up to their EYEBALLS in buy to let mortgages for holiday homes, air bnbs, etc. I think property has been seen as an almost fool proof investment for far too long.
Personally, I'd like to see the crash and hopefully it would deter this greedy behaviour in the future that we see now with rental prices, etc.
Rental prices are tax. Educate yourself my friend. Don’t buy into HMRC’s anti LL campaign.
The elites will buy up all the housing as people lose their homes. Then, they will rent it out at high prices.
Then, they convince everyone that government must help people with the rent and housing issues. When they "help" the people by providing food, clothing, and shelter that they caused to be more scarce, they own and control the people.
I don't follow the bad for renters logic.
> Overleveraged LLs will be forced out, increasing a supply of cheaper housing.
> New equilibrium in pricing found with new LLs paying less monthly.
> Everyone ends up paying less.
What happened in 2008 was that those at the bottom of the market (especially) ended up in negative equity. This seized up the market completely as those people could not sell. It's not like in America where you can hand the debt back and walk away, if you lose the house you keep the debt.
Coupled with the staggering shortage of housing no price drop lasts, the demand is simply so high
People don't own their homes. The banks do.
Exactly
CoolstoryBroooo a lot of people could have used the cheap rates to their advantage and literally halved their mortgage time.
Instead of overpaying they borrowed more money on the cheap to buy a house that that really couldn’t afford.
Add in the loans for fancy cars and holidays and they’re living a lifestyle that outstripped their earnings with interest rates at an all time low.
Having lived through the collapse in the late 80’s, interest rates ramped up to over 15% it was always inevitable that the golden years would not last forever with interest rates so low.
We made a plan after the 80’s crash when moving house, we set our budget and once we’d purchased we made sure that mortgage was paid off as fast as we could.
We’ve two teenagers and I’ve educated them about the problems that were always going to happen with interest rates and the housing market.
The majority simply don’t get how big the Ponzi scheme is.
@@witlesswonderthe2nd883 all that is well and good, but if you time it right you can accumulate a lot of wealth by buying that house you can barely afford. After all, if the house prices grow by a percentage amount then that equates to more value on a more expensive house.
Even if some of those people will have to take a hit now and downsize they will probably only lose a fraction of the additional wealth they made due to ‘overspending’ they made during the 0% interest years and end up in a better place than if they were aggressively repaying a smaller mortgage.
Good point - that's probably globally the same
I will never buy a home until I can afford to own it and not the bank.
I moved to the states when I was 16 years ago, it was a pleasant shock when I found it was normal to get a fixed rate for the duration of your mortgage ie 15-30 years fixed
That’s a heavily subsidized rate as the Fannie Mae and Freddie Mac Federally backed insurance schemes socialize the long term risk. As we saw in the 2008 financial crisis, only taxpayer funds were capable of bailout Fannie and Freddie. Who pay? Renters, the one taxpayer group who do not benefit from this subsidy.
It all started in 2008 when all that quantitative easing was pumped into property, buy-to-let explosion etc. Too many unproductive rentiers extracting wealth from the system.
the only sensible comment right here.
You didn't even touch on the issue of supply, which is the most important variable in the UK housing market. There will never be a "crash" in housing prices because demand will always outstrip supply. Ever since Right to Buy took millions of houses out of council ownership that were never replaced, this lack of supply has filtered through to every aspect of the UK housing market, no matter the region or price.
"Very, very few people buy a property with cash on hand"
Although cash buyers are at the lowest level since 2007, 28% of the houses are bought with cash. I wouldn't call it "very, very few people".
How many are individuals and how many are companies?
Across pond in US, many homes are corporation owned as rentals.
@@weirdo1060 I don't have this data, it might be buried deep in the government sheets. Although, assuming that corporations always buy with cash is wrong. First, there are tax deductions for mortgages. Second, if the corporation is going to let the property, they're most probably doing it with a mortgage: imagine you have 100 and you can buy one property cash for the whole 100 or you can buy 4 properties with a mortgage and 25 deposit each. The rent would cover the mortgage, plus give you 3-4% profit.
Every crash/collapse brings with it an equivalent market chance if you are early informed and equipped, I've seen folks amass up to $1m amid crisis, and even pull it off easily in a favorable economy. Unequivocally, the bubble/collapse is getting somebody somewhere rich
I do not disagree, there are strategies that could be put in place for solid gains regardless of economy or markt condition, but such execution are usuallv carried out by investment experts or advisors with experience since the 08' crash
FWIW, increased mortgage repayment costs for landlords do not usually get passed on to renters, contrary to what this video claims. That's because the housing market has a fixed supply (i.e: it's effectively a monopoly) and so the price is controlled almost wholly by consumer demand, not by supplier costs (in simple terms most landlords are already charging as much as the market will allow, totally independently of their costs). The much more likely effect of rising mortgage repayment costs for landlords will be landlords selling up their properties and leaving the rental market, making way for more homeowners. The housing market just does not behave like regular markets with dynamic supply.
You assume that landlords are not tucking away a sizable profit. How many places are bought without a mortgage - watch that statistic. I know of mortgageless landlords taking the opportunity to increase profits as others simply match interest rate increases - even though they didn't cut rent when the interest rates went down.
@@old_grey_cat The entire point of what I wrote is to point out that "tucking away a sizable profit" is exactly what landlords do because the market is governed by demand for rentals.
@@jsbarretto The main point, yes, but I was responding to likelihood of investor landlords leaving the rental market and would-be owner-occupiers having a better chance. I am not optimistic. The minority with one or two rentals, perhaps, and some who have overextended, but the very wealthy and huge corporations... ? Maybe they have been too greedy too, and will fall over, reducing wealth inequality. We can hope!
Housing should be homes for families not an investment opportunity for the very few. 'Homes Under The Hammer' has a lot to answer for and should be replaced by DIY programmes ! People should be prepared to improve their property over time, not always expect to move into a pristine property. The premium people pay for this stupidity is ludicrous amounting to £10,000s ! DIY is not the death trap it's invariably painted these days. Finally, who's going to pay the rent when people retire?
News: British Housing Market about to crash
HUGE NEWS: We're releasing a series about us taking a train to France
Renewed my five year term just couple days ago, have to pay an extra 14% on my new fixed term rate each month now. Know that isn’t even that bad compared to others but for example if I dropped to a tracker / SVR not a fixed term my payment would have increased by 59%.
Thanks UK gov.
It means that the common people can now leave their parents' house and have a house of their own without having to sell both kidneys, liver and soul... to have a house of their own.
House prices would need to halve to match mortgage rates being double...
Until interest rates go down then it's really not going to benefit first time buyers who need a mortgage.
Dork Angel cheap interest rates matched with people over borrowing have caused this problem, interest rates at the usual 6-8% would have helped keep the market steadier.
@@bassetts1899 Alternatively asking price can be cut in half making the monthly payments comparable to where they were 18 months ago.
@@witlesswonderthe2nd883 Interest rates around 6% didn't stop the house prices rise from 1995 to 2007. Higher interest rates just move more money from ordinary people to the financial institutions. Not replacing the cheap housing stock sold off by the Tories caused this problem.
You know there's a problem with the system when makeing shelter cheaper for people is a bad thing
will be interesting to see what happens. i do feel like we have to pay the bill eventually so to speak. there have been so many bandaid fixes to try to kick the can down the road but eventually we'll need to deal with the market correcting itself.
Trust the markets? Or intervene? I expect the former, which is pitiful as the market is broken.
@@davidmcculloch8490 The Tories are allergic to any form of market regulation. They'd rather watch the country burn than intervene in the business of their banking buddies.
@@davidmcculloch8490 I expect the latter. They will intervene to prevent a crash. Probably by printing a few trillion pounds and gifting them to landlords.
@@thewhitefalcon8539 In a sense we are both right. They will only intervene when the financial sector is in trouble. Yet fail to intervene to make the system work better for society - other than the 1% of course.
@@davidmcculloch8490 it’s not about trusting the market. The market doesn’t care if you trust it or not.
We’ve been continually intervening because we don’t like what the market is doing but we’re not making the problem go away it’s just changing form.
My rent was £330 per month just for a one bedroom flat,Now gone up to £480 per month,Just to keep the roof over my head,Hate to think of what the future be coming too
I asked about a mortgage over the weekend, it was 5.5% interest.
That's so low.
@@diesel92kj1 not really just last june i called into barclays and it was around 2.7% and its expected to go higher, in a year or 2 interest rates could hit around 8%
Wow - mine is fixed for 1% for the next 7 years
@@kelticd5397 Where is your bank? Which bank? Why 0%?
@@zobtastik Wow, 22.9%, 16.9% is all I was offered on a 900 credit score.
Any dip of 10%+ will just get quickly eaten up by cash buying generational wealthers and foreign investments. Also even with technical affordability down, wage inflation means people can actually borrow more than ever before.. when interest rates start to come down house prices will go parabolic again.
Yep we are doomed! All money launderers are welcomed by the British establishment!
That's exactly what happened in Australia. Where some were anticipating a 40% fall in house prices, they stablised and started rising again instead off the back of cash purchases and people fleeing an incredibly tight rental market. Seems like a lot of that is being repeated in the UK.
I don’t think so, buy to let is dead.
Your get more interest at the bank now.
No hassle.
Wage inflation.
What bloody wage inflation? The wage inflation that hasn't existed for over a decade?
Prices go up, wages don't move, that's life in Britain.
To summarise, if interest rates go up, housing prices go down.
Inflation is irrelevant, and wage price spirals only exist in economist's textbooks. It's BoE interest rate hikes that are driving down house prices. Just like every real estate market, British housing prices are dictated by how much prospective buyers can borrow. There is a housing shortage, you see, so people will pay whatever they can in hopes of being the highest bidder. Higher interest rates mean lower borrowing capacity, which directly translates to lower housing prices because that's all prospective buyers can afford.
Now conventional wisdom has it that if inflation is high, you must raise interest rates. This theoretically limits both investment and consumption due to a lack of financing, which means lower demands, which theoretically translates to lower prices, ergo lower inflation. But inflation can have several causes, and overspending is only one of them. Another potential cause is expensive imports, which are unaffected by BoE interest rates. Conventional wisdom has it that higher interest rates attract foreign capital, which should improve exchange rates, which in turn drives down the cost of imports. But guess what? It also increases the price of your exports. This in turn exacerbates economic woes and leads to businesses ramping down their activities, resulting in layoffs. The unemployed will not get a mortgage, which means prospective home buyers can get away with lower offers.
It would be better if people would stop yapping about the mythical wage price spiral, and the BoE would take it down a notch with the interest rate hikes.
There is no housing shortage. There is rent speculation, wage stagnation and unchecked inflation. The houses are all there, but the people don't have the money or economic security to have them.
I disagree. If interest rates go up, spending goes down.
This often triggers recession type environments and desperate people accept lower incomes and house prices when selling.
This ends income growth and reduces housewife growth, often also house price deflation.
But the recession is needed first, otherwise people can afford to just pay a bit more in their mortgage and go on one less holiday a year.
This plan doesn't work when there's not enough housing for everyone close to their place of work. There's nowhere to go. When houses turn to flats people then resort to homeshares or leaving the area for good
@@KyrieFortune no, there is, in large towns housing shortages. I work closely with councils. They're moving people out to different towns because they have no stock and cannot rent in their Borough because the buildings aren't there, so they rent for people in other boroughs.
I'm a homeowner with no intention of selling up, so house prices are pretty much irrelevant to me. But inflation is very much relevant - I am not liking to have to pay more for exactly the same thing, and it is not easy for me to get a pay rise to help pay the extra. I can't go on strike and finding a better paid job is not easy. And would I want a new job in a company I don't know well? It might fail if there's a recession.
"Inflation is irrelevant" 🤣🤣🤣
Even with an 80k deposit. I literally can’t afford to pay a mortgage. If I want too buy a house in my area 2 bed is 300k. I would literally have too suffer every month too pay it. Then on top of that the worry off interest rates going up higher and losing my deposit. It’s just not worth it at all.
Housing market crash would be a blessing. In the Netherlands, rent is kind of regulated. Can't wait for the crash...
Those who were willing to go into debt were given a free ride with cheap money for ten years. Those who were prudent were penalised for saving for the same period. About time the tables were turned.
Can only hope so, anything less than 30% is merely a correction to the levels of unaffordability we had in 2019.
My greatest concern is how to recover from all these economic and global troubles and stay afloat especially with the political power tussle going on in US.
Stocks are pretty unstable at the moment, but if you do the right math, you should be just fine. Bloomberg and other finance media have been recording cases of folks gaining over 250k just in a matter of weeks/couple months, so I think there are a lot of wealth transfer in this downtime if you know where to look.
Such market uncertainties are the reason I don’t base my market judgements and decisions on rumors and here says, got the best of me 2020 and had me holding worthless position in the market, I had to revamp my entire portfolio through the aid of an advisor, before I started seeing any significant results happens in my portfolio, been using the same advisor and I’ve scaled up 750k within 2 years, whether a bullish or down market, both makes for good profit, it all depends on where you’re looking.
I’m in dire need of guidance so i can salvage my portfolio due to the massive dips and come up with better
strategies. How can I reach this advisor?
Having a counselor is essential for portfolio diversification. My advisor is "JACKSON STEN MARSH. who is easily searchable and has extensive knowledge of the financial markets.
Found him, I wrote him an email and scheduled a call, hopefully he responds, I plan to start 2023 on a woodnote financially..
If the government implemented more wide-ranging windfall taxes I imagine we'd see consumer inflation fall, so many sectors have used the Russian invasion to price gouge and the Government is happy to let them.
Windfall taxes would would not bring down prices as the companies would just use it yet more price rises. You would need to introduce price controls and penalise anti-competition measures such as landlord collusion on rental prices.
You really think the windfall taxes are reducing energy bills??? They just fuel inflation further.
@@bobstirling6885 it’s a tax based incentive against inflation beating price rises.
@@Jay_Johnson which has resulted in even higher prices to the consumer, whilst filling the coffers of the exchequer....
No, it isn't (maybe, probably not) going to "crash".
It would be 'recalibrating closer to affordable'.
The five well-wishes of little Rishi were never to be achieved. But the lack of incentive within the government to regulate against another financial crash is even more despairing.
This will be worse than early 90s, people have massively over borrowed.
In Japan houses are like cars and actually DEPRECIATE over time. Houses should be like that
It’s literally crazy that you can buy a house that needs so much repair, and you pay more than the current owner when they bought it brand new!
@@Anne-ku3lj I know mate like how tf
Yes but they are a totally homogeneous nation that’s takes very little immigration, so as elderly die off and children have fewer kids demand falls and houses become cheaper . In the uk we have mass immigration of 1.2 million people with 600,000 adding to the housing demand every year in already the 7th most populated country in the world , notice an Adam Smith ‘Demand and Supply ‘ coincidence?
"The Truss Era" 😂
Ah, i love our humour
I friggin hope so. Based on the average wage. A 2 bed semi detatched in the south shouldn't be more than 250k. In the north, 130-150k. A two bed terrace with a 4m² garden shouldn't be more than 150k in the south. Or 100k in the north. People need the bottom rungs of the ladder, to be affordable for individuals.
People need better wages.
The cost to build the units you're talking about cost more than you've referenced.
Yes land value is ridiculous but you forget cost of materials and labour
@@steph6109 Newbuild houses are overpriced and shit quallity.
My nan was looking at a reletively newbuild flat to rent (Built in early 2010's) and the internal walls were hollow.
Utter shit at keeping out noise compared to the current 100+ year old terraced house were living in now.
That’s too chewp
Housing Market Crisis ... also known to most people as a readjustment of house prices from the insanely ridiculous down to the merely ridiculous ...
Stocks are pretty unstable at the moment, but if you do the right math, you should be just fine. Bloomberg and other finance media have been recording cases of folks gaining over 250k just in a matter of weeks/couple months, so I think there are alot of wealth transfer in this downtime if you know where to look.
@PeterWhite7 Such market uncertainties are the reason I don’t base my market judgements and decisions on rumours and here-says, got the best of me 2020 and had me holding worthless position in the market, I had to revamp my entire portfolio through the aid of an advisor, before I started seeing any significant results happens in my portfolio, been using the same advisor and I’ve scaled up 750k within 2 years,
@PeterWhite7 Having a counselor is essential for portfolio diversification. My advisor ASHLEY AIRAGAHI who is easily searchable and has extensive knowledge of the financial markets.
There’s already a housing crisis - average working people are being forced to sell up or have had their rents put up by their landlords and can’t afford to live in average locations like Milton Keynes.
It's impossible got anyone to get onto the ladder now.
I was lucky enough to use help to buy in 2014, and then buy in with my partner. How can anyone afford this now?
The UK is little different, when we look at supply and demand the UK is a microclimate; houses are supported by shortage of homes and growing demand. Time will tell. 2008 we saw a dramatic fall in prices in the UK, which recovered and then boomed less than 12 months later.
Wages amount to less than 20% of inflation. The biggest predictor by far is corporate greed. Stop trying to shift blame to workers instead of greedy corpocrats.
Funny how people say this channel has a left-wing bias 😂
Price hikes due to business noticing the supply chain crisis has make it hard for competition to be able to erode their precious market share. This is a business competitiveness crisis in essence. Without proper competition, capitalism degenerate into a robber barons' game.
Barbaric country still using ARMs for regular homeowners. smh.
On this side of the pond, we have a lovely innovation called a 30-year fixed rate mortgage; y’all should check it out!
Unless the good houses sit there for months, then house prices aren't going/won't go down. In the area I'm interested in, the good ones are still only staying up for a week or so and there are still heated offers being placed on these, whereas others have been sitting there for months with reductions. I think the market will polarise where the good houses will go up in price and the bad ones go down.
People's resolve is just too high to be deterred: they'll sacrifice everything and just pay a higher mortgage. The last few years have started in motion a chain of events when it comes to housing and I don't think it's suddenly going to stop.
If the "bad" houses drop in price too much the "good" ones will seem too expensive
@@c_n_b I don't think so because the good ones are rare so there'll be in higher demand therefore more likely for bidding wars etc.
House Market can't crash, Price can just drop a bit. People will always want to buy a house. People have to leave somewhere. Be it renting it or buying it.
@tldr news why did you leave the profit factor out of the 'wage price spiral'???
Yes I would like to know this too. It makes it sound like there’s no way to break the cycle. A lot of us watching your channel are not economists and this section was misleading.
I know people who bought their house between 8 and 14 years ago and and the prices went up they borrowed money on the higher valuation of their property and got even deeper in debt so it is their own fault they are struggling now, some people will borrow as much as they can and when they cannot afford to pay it back it is always someone else's fault they are in so much debt, really?
This bubble started under the Labour government back in the late 90's and has been repeatedly reinflated whenever it should have fallen. Its going to he a fun ride and fortunately I made it my business to pay off my mortgage over the last 10 years.
What’s inflating it , 9 million extra people in 20 years , you cannot ever build enough house
Nice job getting your mortage paid off as a priority - very forward thinking.
We spoke to a financial advisor last week for a remortgage; in the space of 6 days, the monthly repayments have gone up £30 because the banks are pulling products left and right. We dread to think what Thursday 22nd June is going to bring when the base rate goes up. Signing paperwork tomorrow to protect ourselves (a bit).
We didn't borrow the full amount we could, and have no other debt... Yet we have just sat down to see where we can further trim the (already lean) household budget.
We are in a really bad situation, particularly with a zombie Government in charge. Could be worse than 2008.
How did housing become investments? Become buy to lets? Become air B&Bs? It's so wrong, we're losing community and gaining what?
Because all the landlord in the U.K. and the seabed, is owned by the crown. We are just competing in terms of who gets to live on it. (Homeowners own the house, the royals own the land).
*All the land
Not sure I would categorise stabilising house prices a fix really. It's more keeping things broken. Appreciate the problems a price correction will cause.
The story at the beginning about interest rates and core inflation is something I hope the Bank of England doesn't believe because it is missing so much.
It takes at least 12 months for interest rates to have a widespread impact on the economy, so only now should we expect to see them bringing down inflation. 1 year ago, UK interest rates were 1.25% so it is hardly surprising that inflation is still high.
Much of the recent inflation is due to energy prices, these have a knock on effect across the whole economy too, as with interest rates this effect is delayed. This explains why core inflation is still high. Ramping up interest rates fast and high just means you are going to overshoot massively and start a recession.
So yes, house prices will crash, unless the government spend a lot of money propping it up. Recession too.
House prices falling is a good thing
Great explainer! Worth noting Government bonds are 'Gilts', rather than 'Gilds'.
If you look at the land registry HPI, (whose data is amounts houses have actually sold for, not best-guess-for-the-advert), property prices for the entire country rose 4.1%, which is a little different to the listed graph’s drop of between 1 and 2 percent.
land registry data is many months behind current market though
@@philthompson2239 yes because it’s fact. It’s actual completed sales. It’s the old trade-off between speed and accuracy.
Plus, if you look at my comment, it proves my point. The bank graph showed house prices (of one bank) dropping, in the same month when prices were rising sharply.
If it's completed sales then these prices were agreed 3-6 months earlier.
@@c_n_b true, but they don’t go on record at that point. The handshake happens, then later when the funds have been transferred and the land registry records the sale, (anywhere up to six months later), then it becomes data.
Make No Mistake, House prices going down is a good thing, they have been way to high for way to long. It's going to be long painful road though, because it was left to spiral into the crisis it is today, people will be stuck in their current homes for years before they can sell or move. It has to happen though, and we need a government that properly regulates the market, encourages building of new stock and better use of the current stock. If someone buys a home and nobody lives there for 3 years, the house should be repossessed regardless and sold onto someone who actually wants a home. Soo many policies could be implemented to stop this from happening again.
This entire machine is irreversibly broken.
It’s called fiat currency with no value and endless amounts added at the drop of a hat
Hmm entire market arounds housing is completly effed and needs smashing down and rebuilding from scratch
As a home owner mortgage free I wish for a housing crash because only the bankers benefit whilst the public suffer.
Unfortunately middle class wealth has been mostly accured through home owning so in a crash they'll lose out while the wealthy yet again hoover up the assets and make them scarcer and can afford to just sit on properties unless we put mechanisms in place that make profiteering on housing unattractive 😢
We had a 5 year which finished last month. We were on about £898 a month is now 4.1% and about £1100. Luckily my student loan ended and I'm £183 a month better off! The world gives the world takes. No idea what we'd do if we were younger and facing £500+ more a month. Sad.
Honestly my generation is so screwed. I’ve been lucky and able to afford to take out a mortgage on a house. However I did this when mortgage rates were low and I’m now looking at a ~£400 increase. I’m on a plan 2 student loan so there’s a few hundred pound chuck going towards that every month, yet the balance is still increasing due to interest.
Ironically maybe those who have been unable to afford a house will be better off in the coming years.
@@ondene5748 sorry to hear that! How old are you? I'm 40 so my debt was like 10k leaving uni, I hear folks these days are leaving more like 40k to 50k!
If you have not had kids yet... wait till you see how much nursery is!
Ive been hoping for a house price crash for over 20 years. When you realise property is huge part of the rich and powerfulls storage of wealth you also realise the rich and powerfull will do everything to prevent it.
Yes they make it out in this video it's a really bad thing but for us working class it gives us finally a chance to get on the housing ladder :)
It's not even the 'rich and powerful'. Normal working class people owning houses would be screwed by a huge drop in prices.
We need a leveling out, not a crash.
@@llanieliowe794 stop being delusional. you won't be able to get a mortgage if you are on a lower wage and/or are not employed by a big time employer, no banks will take you when the interest rate is so high or the market crushing. working class only benefits when everything goes well and eveyone gets a piece, as soon as it becomes cut throat, nothing will trickle down anymore and the less fortunate will always be the first to fall. even if you start a revolution, the most likely outcome for you is that you take all the risks and do all the work for someone else to claim the result, you'll still end up with nothing and you lose what you already have.
This interest rate madness has caused my landlord to need to sell as their mortgage doubled overnight, and me to need to get a deposit together in 2 months so i can move. This is going to be a common thing. So less houses to rent and more houses on the market for sale, and higher interest rates for mortgages. This is currently bad for a lot of people, will get worse, and is happening during a cost of living crisis. This is nuts, but house prices have to crash to balance this if the Internet rate stays so high.
wont you be getting the deposit back from your current landlord? it can be used as deposit to pay the next landlord? no?
@@lone4896 * laughs in deposit dispute *
Housing crash won't balance anything. People who can't afford their current mortgage will down size, landlords will sell to bigger landlords for cash.
What this will do is trigger a recession. Employees will move employers will have to close or downsize their businesses and everyone left will have less money to spend.
We're going to have a deep recession. Its an awful thing.
I don’t know your financial situation but it would WONDERFUL if you can buy the house you are in?
@@Anne-ku3lj I looked at that and I am about 50k short of being able to buy. Was a good chance to learn more about mortgages and buying houses though, so I will be better prepared in the future.
@19:14 I just want to correct you. Rising rates will not cripple home owners, they do not have mortgages. Mortgage holders own nothing until the last payment has been made, they are not homeowners.
To be fair it should have fallen years ago, but it kept rising and has been forcing working class people into to spend half their wages on rent
Government has been kicking the can down the road since 2008
Why would it fail if UKs population keeps increasing tell me?
Some people are loving money too much, which is causing this escalation in prices and rent.Even if anyone just wants a simple life they are caught up in this ever increasing cycle of price hikes and forced to go along with market rates.
im approaching the point now where i literally cant pay basic bills despite being on above average wages!!
I'm not really sure I feel bad about the potential crash. Yes, those that bought a property to rent it out will be affected. And badly. And those that are renting were and are affected. Badly. But the renters will have to endure some time of discomfort and after the crash, will live better, due to the crash. The only negative will be for the landlords. Considering they have caused the property shortage in the first place, not sure I really feel bad for them.
So bring it on!
This will trigger a recession. Maybe that's the goverments aim to stop wage-price inflation anyway.
No point having a deposit when you have no job and 10% interest rates.
Yes I have no sympathy for home owners personally as they've been actively trying to make it harder for renter to buy for years
It's going to be really really hard for the UK to avoid a recession
Avoid? we need one. When people get layed off they cannot afford to buy things and companies will have to bring prices down.
Prices could quater and still be too high.
A market crash is bad for renters, but if the cost of a mortgage goes up, it creates downward pressure on owning a home. Renters will exit the market and go to apartment complexes which are built to be rent. The average price will go up, but it won't be enough to counter the increased costs of those who buy to rent a home. This means those who treat real estate as an investment will be reminded that the line doesn't always go up. Many of these home will become unprofitable to attempt to rent, reducing demand to own a house, dropping prices down to a level where more can buy a house. Having homes for rent isn't always bad, but when there's an entire market buying homes just to rent them it's an unsustainable market.
A housing crush would do lots of good for society in the West. Especially for those who have been saving and waiting.
It'll do good for me as I'm waiting for prices to drop to buy a house. (I have owned before but had to sell due to a break up).
However it won't be good for sellers, because if prices drop too much, it'll leave them in negativity equity, meaning they physically can't sell their homes. Meaning those homes won't be put into the market for buyers to purchase.
Would you want to pay £20k to sell your own home? Could you pay £20k to sell your own home? That's the reality facing sellers in the coming months. It means no houses for us to buy.
What surprises me is how banks are still lending such a high income multiplier despite raising interest rates, I'm surprised that hasn't fallen in which case I can actually see house prices *crash*, until then I can only see a slow puncher effect or even a raise since we're out immigrating our house building.
this is the only sensible comment. House rprices have nothing really to do with supply and demand. What really governs the price of a house is availablity of credit. If sellers (either indivdually or cuturally) know that a bank will lend 7 times a salary, then prices will reflect that. And it's not even the banks money, they will get bailed out - so they don't care, it's not the buyers money - they don't care what it costs they ony care about the next repayment. And the the seller doesn't care because they usually just recycle it back into a nother property.
TL;DR high intrests rates are successfully reducing housing inflation and that's apparently a problem (for rich home owners)
No more TL;DR for me. Blames workers consistently and now almost a third of their videos are sponsorships. Sold out hard. Do one.
Apparently the IMF wish the UK interest rate to be around 6.50% . If that happens can imagine those with mortgages over £500k???
Why do you care 🤨...are you one of them btl landlords?
@@Azmodaeus49 Exactly. You should only take a mortgage you can afford and as an "intelligent" human being, you should consider a crisis too.
M. Khan interest rates normally sit between 6-8%, they’ve been kept artificially low since the 2008 crash. I lived and payed a mortgage through paying 15% plus in the 80’s.
The rates were low and always had to correct themselves, I’m just surprised they spent as long kicking the can down the road, anyone with any sense could see it coming.
In the 80’s houses were cheaper in comparison to the average wage!
@@Azmodaeus49
No actually . Finished off my mortgage back in 1999.. But feel sad for new house buyers who most have huge mortgages
Man if only someone had said that the government printing an endless amount of money was a bad thing.
But both the conservatives and labour are promising more of the same.
Bold of you to call Truss's tenure as PM an "era"
The economy is currently unsustainable. There are too many taking too much at the top. Corporate greed has caused this situation and there is just not enough money to go round anymore
Just managed to get a 4.2% remorgage up from like 3.summat% which is still affordable for us.
Normally it would be bad for renters, but in this instance it is good for the renters. The government is changing eviction policy and the abilty to charge outlandish rents or rent increases.
Market needs to crash it's over priced end of story people need affordable housing
Rishi Sunak amending his To-Do list: "Hmm. Halve the inflation? More like "halve the economy". Grow the economy? I like "Grow profit" more. Reduce debt? *crosses out* "Cut the NHS waiting lists? *erases 'waiting lists* Stop small boats. To be continued ..."