Reply to: UK housing mini-boom is gathering pace, property firm Rightmove says

[WTFH]

Happen to know of somewhere, do you?

Maybe...

[ladymuck]

Did you ever consider moving out of the smog-filled streets to leafy Surrey?

Happen to know of somewhere, do you?

[jamesbrown]

I can't see there not being a big rise in repossessions either.

There will be some repossessions, but the banks have already signaled a willingness to avoid those as far as possible. Repossessions aren't necessary to reduce prices.

The real impact will be the accessibility of cheap credit. No bank is going to continue lending to low deposit FTBs when unemployment rises appreciably and the gov't won't step into that space sufficiently to offset it. We've already seen this in recent months. Some are coming back to the market now, but they'll be withdrawn as the unemployment picture becomes clearer. Unless the market is underpinned by FTBs, it will deteriorate sharply. So this stamp duty trick will unwind as quickly as it wound up.

[rogerfederer]

If this chart is correct, unemployment is already nearly twice what it peaked at back then (~1.6m).

Click on 25Y
United Kingdom Unemployed Persons | 1971-2020 Data | 2021-2022 Forecast | Historical

It takes a LOT to be classed as unemployed now, so the stats now are arguably worse.

If I'm unemployed but have over £16k in savings (or specific types of assets) then I'm not counted as unemployed. Until that's burned through, I'm not classed as looking for work and so am not counted as unemployed. Mad.

Please keep this in mind when comparing stats from 2008, which - up to 2011 - were much more representative of true unemployment. The Tories changed the way in which the stats are represented. They are the types of managers in companies, who I'm sure we've all met, who fudge figures and use accounting tricks to try show improved performance, rather than the preferred realists who try to provide clarity and the truth.

[GigiBronz]

Housing market will definitely be propped up to the sky.
Depends whether rents will stay the same. If rents stay the same, what would people do? Universal credit?
Are we re-creating feudalism with a mass of inert people living out of rent extraction mechanism?

I have a group of friends, yuppies like me, they are somehow comfortable with where they are.
Tired of the pressures with rent increases, moving around and sub-par accommodation. (well, we've all experienced it)
They are all looking for houses now, half of them recently bought.
I told them they are mad but actually it might have some truth to it...

[AtW]

It might be, but those people can't be evicted, they can defer payments on cars/mortgages etc

This time it's truly different.

[DealorNoDeal]

Did not happen in 2008/09, won't happen now - lots of ways to fix it for banks: give them negative rates loans that pay THEM - as long as they defer mortgage payments for those affected, but they get extra margin on ALL mortgages, boom times for banking!

If this chart is correct, unemployment is already nearly twice what it peaked at back then (~1.6m).

Click on 25Y
United Kingdom Unemployed Persons | 1971-2020 Data | 2021-2022 Forecast | Historical

[AtW]

I can't see there not being a big rise in repossessions either.

Did not happen in 2008/09, won't happen now - lots of ways to fix it for banks: give them negative rates loans that pay THEM - as long as they defer mortgage payments for those affected, but they get extra margin on ALL mortgages, boom times for banking!

[DealorNoDeal]

However, they will lose when unemployment skyrockets because the banks will pull low deposit loans. The banks are only just restarting 10% loans and are still not back at 5%, on the whole.

I can't see there not being a big rise in repossessions either.

[jamesbrown]

Unemployement currently 3m. 9m on furlough.

Some commentators are predicting 1/3rd (3m) of furloughed workers will be layed off.

If we did reach 6m unemployed, it's hard to see how that wouldn't have a big impact on the housing market.

You can already see the signs. Hundreds or thousands or people applying for a handful of roles, even in entry level retail.

It's going to be a bloodbath. You can never underestimate the extent to which the gov't will prop up housing; it's about the only thing of valuable left However, they will lose when unemployment skyrockets because the banks will pull low deposit loans. The banks are only just restarting 10% loans and are still not back at 5%, on the whole.

[vetran]

Unemployement currently 3m. 9m on furlough.

Some commentators are predicting 1/3rd (3m) of furloughed workers will be layed off.

If we did reach 6m unemployed, it's hard to see how that wouldn't have a big impact on the housing market.

And we were worried JezzyBell would ruin the economy!

[DealorNoDeal]

Won't last. The real action is later this year when the furlough unwinds.

Unemployement currently 3m. 9m on furlough.

Some commentators are predicting 1/3rd (3m) of furloughed workers will be layed off.

If we did reach 6m unemployed, it's hard to see how that wouldn't have a big impact on the housing market.

[vetran]

I won't be there!

now sounds attractive

[WTFH]

Nah she wants decent neighbours!

I won't be there!

[DimPrawn]

Nah she wants decent neighbours!

But isn't sasguru in Brussels now?