House market - how low will it go?

[jamesbrown]

I wonder why that was, the B word the gift that keeps on giving

Oops, typo, I meant 2009. Transaction levels declined massively in the year through June 2009, along with prices.

[AtW]

They are, but the new standard of 60% LTV by the banks will definitely cool things somewhat.

Watch Govt guarantee 30% extra to get the market going

[jamesbrown]

less supply will reduce any major drop in the market prices.

No, all it means is that fewer transactions have a bigger impact on all-of-market indices, which then sets the tone. All-of-market indices can crash when transactions are low, no problem there.

[MrMarkyMark]

Oops, typo, I meant 2009. Transaction levels declined massively in the year through June 2009, along with prices.

Prices did drop a little/stagnate last year, due to uncertainty, so you were right by default

There is also a lot of uncertainty in this situation, that can often mean people panic.... and we know what panic does

[jamesbrown]

Prices did drop a little/stagnate last year, due to uncertainty, so you were right by default

There is also a lot of uncertainty in this situation, that can often mean people panic.... and we know what panic does

Right, agree. I mostly agree with Whorty too, just not his point about low transaction levels protecting the wider market once the lockdown measures start to be removed. It's those that are forced into selling (e.g., because they were made redundant and need to move) that will drive sentiment in the wider market.

In the medium-term, there will need to be measures to pay for all of this too. Borrowing won't be the only answer. Probably a "mansion" tax (which was already being mooted and will mainly impact the SE) and, less likely, a general wealth tax.

[scooterscot]

The ease of credit is by far the strongest driving factor of increasing property prices, not supply & demand. Conversely when credit markets lock up, as they are starting to show, we'll see a massive pullback in house prices to the mean (3x average annual income). 2020-21 is going to make 2007-08 seem like a bump on the road.

[AtW]

The ease of credit is by far the strongest driving factor of increasing property prices, not supply & demand. Conversely when credit markets lock up, as they are starting to show, we'll see a massive pullback in house prices to the mean (3x average annual income). 2020-21 is going to make 2007-08 seem like a bump on the road.

If Govt keeps paying people up to £2500 per month, then it limits how much can be borrowed

People could not afford houses when they had jobs, in coronaworld they won’t be able to - house prices will drop (at least relative to can of beans), with just one notable exception - luxury flats in Bham

[jamesbrown]

with just one notable exception - luxury flats in Bham

Yes, you won’t be able to give those away

[The Janter Effect]

The ease of credit is by far the strongest driving factor of increasing property prices, not supply & demand. Conversely when credit markets lock up, as they are starting to show, we'll see a massive pullback in house prices to the mean (3x average annual income). 2020-21 is going to make 2007-08 seem like a bump on the road.

Oh rubbish - you really are a nonsense spouting Cassandra.

As I've said elsewhere, so long as this lockdown is lifted sooner rather than later, things will recover remarkably quickly. As I see it, The main downside to all this will be another era of austerity and increased taxes.

But, carry on having a good gloat while it lasts....

[BrilloPad]

If Govt keeps paying people up to £2500 per month, then it limits how much can be borrowed

People could not afford houses when they had jobs, in coronaworld they won’t be able to - house prices will drop (at least relative to can of beans), with just one notable exception - luxury flats in Bham

What abouit flats above kebab shops?