Nationwide Building Society House Price Index June 2021

[Martin@AS Financial]

Key Points:

• Annual house price growth rises to 13.4%, the highest level since November 2004
• Prices up 0.7% month-on-month, after taking account of seasonal factors
• Northern Ireland sees strongest growth in Q2, Scotland the weakest, closely followed by London

Full report here:

https://www.nationwide.co.uk/-/media...un_Q2_2021.pdf

[OwlHoot]

Seems to me there's a big imminent property price crash looming up out of the fog, but then one could say that practically any time.

However, house prices are close to a record high relative to average incomes. This is important because it makes it even harder for prospective first time buyers to raise a deposit. For example,a 10% deposit is over 50% of typical first time buyer’s income. A potential buyer earning the average wage and saving 15% of take home pay would now take five years to raise a 10% deposit...

[Fraidycat]

Seems to me there's a big imminent property price crash looming up out of the fog, but then one could say that practically any time.

They would crash if it was a free market. But there is government intervention to prop up the market.

Last time the market looked like it would crash, 2008, they cut interest to rates to almost zero.

Who knows what scheme they will come up with next time it looks like there will be a house price crash?

Probably print even more money to keep house prices inflated.

[GigiBronz]

They would crash if it was a free market. But there is government intervention to prop up the market.

Last time the market looked like it would crash, 2008, they cut interest to rates to almost zero.

Who knows what scheme they will come up with next time it looks like there will be a house price crash?

Probably print even more money to keep house prices inflated.

I can't think of any except rates going negative and allowing people to use their pension pot as deposit.

They will find ways.

[d000hg]

It is bizarre that in a time when people are losing jobs and others are fearful for theirs, and the economy generally is so terrible, that prices are going up rapidly. It implies people have the money to spend

[Lance]

It is bizarre that in a time when people are losing jobs and others are fearful for theirs, and the economy generally is so terrible, that prices are going up rapidly. It implies people have the money to spend

Some people have money to spend.
There aren't enough houses being built.

Simple really.

[Fraidycat]

It implies people have the money to spend

It implies people have equity to spend!

House prices go up, existing owners now have equity. They take out the equity as a low interest loan and leverage it up with further low interest rate loans to buy another house. This then causes prices to go up even further allowing more people to remove equity to buy more houses and push up prices even further.

It all works as long as people have jobs (or government handout money) to pay the interest on those loans, including tenants they also need an income to pay the landlords BTL mortgage.

The ponzi wont collapse while everyone has the income to service the debt.

[d000hg]

Some people have money to spend.
There aren't enough houses being built.

Simple really.

And Covid has accelerated this because?

[ladymuck]

There's plenty enough housing. It's just not located where people want to live.

[Fraidycat]

And Covid has accelerated this because?

Because of Covid they cut stamp duty, cut interest rates from 0.75% to 0.1%, and also signalled interest rates are not going up anytime soon.

This time last year they were even talking about negative interest rates.

They also handed out cheap covid loans which some used as deposits to buy another BTL property.