UK house prices are insane and definitely need some correction.

Rightmove asking price index is not worth the paper it is written on

Higher interest rates after 10 years of historically low interest rates will affect everything, not just housing. Everything will get hit - business, commercial property, jobs and public services. Everything except MP pay!

House sale on my road fell through again this weekend. Thats twice in 3 months.

Great. House prices should never have been a commodity in the first place. Housing is a human right, not an investment vehicle.

Here's the problem with house prices - they always talk UK averages. The UK is not an average however. Some areas, are so extortionately overpriced that they drastically increase that average. Those properties are the most at risk of a reduction, and when they do, they impact the average. For the majority of houses however they see very little to no impact. This is because even at higher interest rates - they remain affordable. Anyone waiting for house prices to crash so they can afford one - you never will. If they crashed, you'd never get a mortgage. if they only reduced a bit, your interest rate will mean you never saved a penny in the long run.

House prices should be at affordable levels. How is a carer on £20k ever going to be able to afford a house ,given that they have to pay 60% just in rent and cant save?

Come on only vested interests are still talking the market up. The outlook is utterly dier!

Great analysis!!! Thanks for sharing valuable information! 🙏

Thanks for the great content!

We are gonna drop imo 35%

My homes value has dropped -19% since January. Home values in Florida are declining rapidly. The Case Shiller index has Florida home values dropping -8% for the month of April alone.

One of my friends put an offer on a 2-bedroom ready to move in flat with two bathrooms (including master ensuite) in a central city location and after much bargaining, it was finally agreed at £150,000. The bank has now come back and said they can't offer the mortgage because they think the flat is over valued!

Rightmove index is not 'asking prices' its NEW asking prices taken from the last 4 weeks (prior to report)., so this doesnt take into account properties that have been on the market and reduced price.

The fall will be around -30% in nominal terms from the 2022 peak. There won't be a sudden "crash", but a monthly gradual fall till we reach that -30% in 2025. Sellers hoping that they will just stay put will wake up in 2025 and find out that their houses have lost at least 30% of their 2022 values. I think that'll be OK for most people. Just don't make the mistake of accepting as the most natural thing in the world that prices went up +25% in only 2 years! I understand it's in your interest if you own a house, but the reality is completely different now.

Err what about net migration? The last two years the population grew by 600,000 last year and 500,000 the year before, its been getting higher and higher for the last two decades. Building has fallen well short for many years. The supply and demand imbalance is at unprecedented levels. As soon as interest rates stabilise prices will boom.

Thank you for your insight

They will fall until they are affordable in relation to income. Cant pay more than what we need to after tax, food, clothes, phone, electricity, and other utilities...

they may drop but you know house prices will double after this happens, its a good time to buy

Brilliant use of graphical data, good video.

Great analysis.

Check how many properties on the regulars websites (zoopla, etc) have dropped prices… This devaluation isn’t just a myth, it’s happening! Soon the buy to let owners tryouts won’t see sufficient profits, consequently they will need to get rid of these commitments. Awesome for those with liquidity and looking for a residential property at decent price. Hold on to your cash, you’ll need it.

Great videos - keep it up 🤙🏻

Why only now is there a focus on further rate hikes because of persistent core inflation - which is a measure that includes housing costs which are driven up by higher interest rates - why didn’t we hear about it when CPI was still rising - why only now when CPI is falling and is likely to fall aggressively over the next four months?

Interest rates are not the issue, the issue is decades of massive price increases have created built in high interest rates. Low interest rates are harmful to asset prices in the long term as they push out first time buyers and regular people. Every £100 k extra on a house realistically is the equivalent to several percentage points in interest rates. We are at the most unaffordable level in history and it’s sucking huge amounts of money out of the economy that could be spent elsewhere..not to mention insane rental prices which is all linked in.

90% of the properties are now selling in auction. Putting first time buyer off when the need apply for mortgage under the auction deposit rule

House prices fell by 50% in Ireland in the late 2000s

Hi there, Rising interest rates, potential housing crash and weak economic growth. If like me you are renting, would you buy a property now or continue renting?

I haven't observed much of if a drop in Belfast. I did negotiate down a couple of properties but nothing massive, and most are sold within 2 months max

5%-7% is the historic norm. These present rates are not high. Population size is immaterial, it's all down to who can afford a house. Prices are already 12% from peak and the year end will be 20%. Just look at the reductions in borrowing with these higher interest rates for the same monthly cost. Down 35% at present. And interest rates will continue to climb because way too much debt has seriously damaged our economy, all because of house price greed. If the bank rate reaches 7%, mortgage rates reach 9%, (already 7.5%) and that's a 50% reduction in borrowing. And that's my prediction, total drop in price will be 50%. Another factor are swap rates, and mortgage rates are dependant on swaps. They are heading for the moon.

In Western Australia we see the asking price then after a few months we can see the sold price. It gives a really good idea which way things are going. We can also see an estimate of properties not on the market. They show a low medium and high price and indication of how likely will sell.

its so interesting how the real estate market is so similar on other countries. In US, Florida, houses are still selling above asking prices, yet a few states to the west -house are sitting for months without offers or selling by crazy cut prices (down 30% in some areas). In Mexico, same situation - some places selling like crazy and others that were "booming" are now dropping.

To the UK youngesters. My opinion as a non-UK citizen, living in Europe, EU citizen. (This part is a disclaimer) +(We still wish best for you UK despite bad blood from UK politicians). Living with your parents (as 20 or 30’s year old) is not a bad thing, it is a safe way and place for you to start building financial “ground”, a stash for plan your life as is goes. Even if you marry, living together with your parents (either groom side, or bride side), allows you to build your financial strength, for the couple to chart the living in all conditions after having bought their house.

I am noticing a divergence between new home and second hand prices. Particularly second hand homes that need work which I suspect is a product of the lack of builders.

Great vidio m8

Im always bemused when people talk about the value of their house, unless you bought 2 or want to move to somewhere not as nice who cares? Its like saying your arms are worth a million pounds each, how do you plan to cash in?

Im thinking they won't crash, in my books we never got out of the 2008 recession.

Time for that correction and more realistic housing prices!

What's happening is people are working and struggling to pay rent and keep the electric on, never mind buy food. The average worker in Britain is working to live in a changing community that it pays more to not work to be part of. We don't need charts and data all we need to do is sit on the doorstep for a few hours hopefully without incident.

The amount of singletons in 2023 is astronomical. I know a lot of people in their 30s, 40s who choose to live single lives or are in relationships but live apart. I suppose people dont want to go through life knowing their partner can pull the plug at any time.

These problems will not be resolved for a long time. Nobody even tries to fix anything. Sadly, the most sensible thing for high-skilled high-earning professionals is leaving the UK.

Ive tried to sell for a year and failed, dropped price 70k and still failed. Decided the wisest choice is to weather the storm, cling on for dear life and sell in the future once everything is looking rosy again

Epic realistic views

No there is shortage of rentals in

I am not sure did you mention somewhere about it but it's very important UK government decision : The personal allowance is increased to £12,570 for 2021/22 - an inflationary increase of £70 over the 2020/21 level of £12,500. However, the allowance will remain at this level for 2022/23, 2023/24, 2024/25 and 2025/26. As incomes rise with inflation, people who currently do not pay tax may start to pay tax once their income rises above £12,570.. It's mean in line with other factors, mainly soaring living cost, inflation, stagnation of income over a couple of years people will have more problems to save money, problems with meeting lenders criteria, less of saving, more spend for living and taxes. Houses price MUST fall. The question is, what will be further after 2026.😮

House prices have kept increasing ridiculously at out of hand high rates that they were always going to eventually slow down and then fall at some point. If you're looking for your home to sell based on house prices rising permanently at ridiculous out hand high rates you are setting youraelf up for big fall.

I keep seeing "House prices dropping" but when I look it's still the same old shitty terraced houses with no gardens for just shy of £200k. When will they actually drop for the first-time buyer...

Interest rates for mortgages are just profiteering and proves competition is not working, my first mortgage in 2020 when base rate was 6% was 3.95% - why are we only seeing rates above base rate now?

Majority of the view is to have the Median price levels nothing but ideal thing gets dictated by economic conditions of the Region. London is no Frankfurt and Neither of it's One.

30% min but over the next 2 or 3 years definitely. Good stuff to for the younger generation. Don't buy now would be my advise , give it another 2 or 3 years 😊

I wouldn't be so worried about first-time buyers, as they simply won't be able to get into debt at the moment. They'll have to cut their cloth accordingly and buy something cheaper in order to be able to afford the repayments. The real problem is with the people who took on more and more leverage as rates fell, and instead of paying down their loans when they were ahead, took on more and more debt on variable rates (or 'fixed' rates as they are weirdly known in the UK).

Money being spent on servicing interest is money out of the economy. Personal spending cuts will be huge. Consumer confidence low. If interest rates have to come close to parity with inflation it will be a blood bath. What other way is there to put a lid on inflation. If they aren’t careful inflation will run away and we will be the next Argentina.

Home supply will never rise to equal demand so average prices can't fall in the long term. Fluctuations and local effects don't mean very much.

Don’t worry too much folks. We are a small island and our population is growing there will be a shortage of housing for a long time, especially when you have a badly run as we do and have done for years, blue, red or yellow 🤷‍♀️

That is the main problem, it is only worth what someone is willing to pay not what an estate agent tells you it is worth. The housing market is just one massive scam.

More graphics, less facetime pls.

In the long run we would all be better off if house prices dropped by 70% more inline with Europe and peoples wages.

Definitely need to the interest rates to 6 percent

High rates, if we ever get them, are always good for the economy, just means different, better, solvent people, have a return of savings and they can spend into the economy. Rather than the in debt and living it up of debt sorts. Rates are still very low. Favouring the few, not the many. Rates need to double at least yet. This is a good thing for the many. Solvent people feeling safe to spend is better than those using debts to do so.

Home prices will continue to fall well beyond a decade. Too many people locked in record low rates, for RECORD HIGH COSTS. Prices only need to decline about -10% for catastrophic results. Risky HELOCS, Airbnb busts, and decade long value declines, combined with commercial real estate in the red, across the board. This bottom won't show until the mid 2030's at the earliest. -40% when the dust settles. God bless, America.

30% up by end of year, because estate agents are so honest

Why global house price falls vary across the world. kzfaq.info/get/bejne/rcyTac1j253Wo4U.html

Me and my Wife both working full time, renting. We have 10k savings. Unless the price will drop £200000 they might as be on the Moon. And for us property are...

History shows, that after a price fall, they rise beyond what they previously were, so if you're not going to sell for many years, don't worry.

You were wrong predicting a crash last year and still are missing lots of factors. House prices have gone mad in recent years despite covid, the economy and all sorts. Finally some common sense is creeping in as the next problem is interest rates. So it is not a crash, nowhere near a crash just settling to common sense. While the average house price is on the rise, you are wrong in using this figure. First time buyers do not buy average houses, they buy a flat or run down house at the bottom of the market. Those prices are staying very static. It will all blow over in 6-9 months. The reasons for the high inflation are one-off things like brexit, covid and Ukraine, as the inflationary issues drop out the inflation equation and the drops in prices like fuel become the factors in the inflation figure we will see inflation dropping and so interest rates dropping. Also we and an election coming soon. As we approach that the economy will miraculously start doing well.

Stagflation ?

People will just not sell. Prices will remain flat with some discounting (all relative if your house is below market value then the one you’re buying can also be the same)

So four of the five effects you mentioned can be easily addressed by the trend we see for households to combine (by taking roommates or children moving back in with their parents) to save money either for living expenses or to buy a house so it seems to me the pressure you describe aren't really likely to have their full effect because people will intuitively move to reduce their costs and thus the demand for individual homes can be reduced

It'll be more like the crash of the early 70s which ended up more of a blip and forgotten due to high inflation and rising wages.

Due to shortage of houses it is less likely housing market will crash

We bought our flat 538k, the asking price was 650k, the after 6 months they reduced it to 585k... Obviously we didn't want to pay more 🧐

There may be a few years of decline but then they will skyrocket back up to even higher levels after that... supply and demand is the biggest issue that will remain for decades to come.

Rising interest rates with no upper limits is going to be disastrous

House prices need to drop by Al least 50% - the average house price should never be more than 3 times average earnings - period - every Federal, State & local Gov’ts. need to employ all mechanisms available to them to ensure this occurs - domestic housing needs to be looked at as a right for all citizens & not an investment vehicle - if investors want to invest in property as an investment vehicle, no prob’s, they can invest in commercial property - until such time this is instituted into a country’s political policy for domestic housing sector, we’ll continue to have the boom bust cycle for ever & a day, particularly while Gov’ts continue to keep the money printing machines operating - the same can be said for the Stock Market re an overpriced sector.

This illustrates why it was such a bad idea to give control of interest rates to the Bank of England. Of course the big beneficiaries of high interest rates are the banks (bankers looking after their own). Poor people are becoming poorer, their money siphoned off by the greedy bankers. And as credit becomes more expensive, this will in itself feed into prices, further stoking inflation.

Massive sums of money being invested into residential property! Where else is money safe when stock crash will half values b4 settling down 30 to 40%! And don't forget the impending dollar crash. The rich, powerful, successful landlords, banks, etc are buying residential for renting and long term security. The current market situation is unique! 5% interest is still cheap compared to historic long term rates! Commercial property will reduce in price! 500k plus residential property can be found at a discount. London property will pull back as people move away. The average house over approx. 500k, may flatline for a while. Renovations and property in unfriendly area's at small discount. But property under 500k in good areas will not be discounted because their is a shortage of property and excess of cash and other buyers wanting to buy 3 to 6 bedroom homes so they can work from home, leave London or crowded area's and smaller homes out grown! My own guess for low energy well maintained property under 500k is flatline this year, then slowly rise by 5 to 10% over 2 to 4 years. Also expect an influx of European job seekers doing professional jobs or jobs we can not fill. Plus a large influx of unaided refuges whom will need housing!

Great news, keep falling please.

House prices really need to drop by 40% - the avg salary is 10 x less than avg house. Bailey is deliberately trying to crash the market through an enforced recession

There will never be a housing market crash ,people have to much money houses are selling at a rapid rate ,Cars also selling at a rapid rate so much money available, if the interest rate went to 15% then you will have a housing market crash .

Houses most crash people cannot afford to pay rental fees we work for only paying rent why are we working for it's better not to work because we don't have enough money for rest of our life it's crazy high all ready houses went far far what we think it's crazy

People are paying for their decision to rent from the bank,

What a stupid thing to say about Liz.....she had it right, Sunak wrecked the economy!

How interest rate is going to have effect on Inflation when it is happening due to Ukraine war and Brexit.

I live in the London commuter zone. Houses are going quickly and still getting their asking prices. Yes, the prices have stalled a little, but at a ridiculously high level. Rents in even cheaper areas of London continue to be right up against the nail of what tenants can afford and a modest one bed flat continues to need a couple where both work if they are on median salaries. I am ignoring inflation. It is very grim for those who want to get on the ladder and stop haemorrhaging money with rents. Thanks for another great vlog.

I've got a 10% deposit in cash, ready to go. I am living rent free at my parents (I recently moved back in with them due to a relationship breakdown and subsequent house sale). I am in no rush to buy a house when mortgage rates are imminently about to rise again. There must be millions of people like me, thinking we'll just hold off until inflation and interest rates/mortgage rates start to reduce. Why would I want to pay £800 per month on a mortgage when I could (potentially) wait 8 months and pay £500 per month instead on a lower rate? This mindset is lowering demand for buying houses, and therefore will surely lead to lower prices, even in places that are lower cost than the average already?

50% nominal falls from Aug 2022 over the next 3 years

Depends of the area .. rough council estates are on a decline yet upperclass and Muslim ghetto's are on the rise

I dont believe it will

The global economy lecture and studies now need forgetting all about it because a new strange economy is talking over ... prices of everything will keep going up including the property market...They WEF want us all to suffer and own nothing and be happy... So don't expect party time any time soon.

The British public need to accept their role in all of this. They over paid and fuelled the bubble and now expect to be bailed out of their financial mistakes. Basically, there is no personal accountability for crappy financial decisions and they need to learn a lesson not to over pay in the future. Property speculation does no social good whatsoever - makes British workers too expensive, social division etc ..... Any idiot paying more than 4.5x earnings for a property deserves all they get.

Don't buy a house, buy a plot of land and build something nice, modern, energy efficient and inexpensive and never build a house with tiny little bricks that someone has to spend days and days of skilled work gluing them all together with cement!!

One nuclear incident anywhere in Europe and it’s all game over 👍

💰

Mor mortgage went up by £600, which was really scary. I can afford it, but it's put a huge squeeze on my finances, especially with energy, fuel, and food price rises. I'd estimate I'm 800-900 poorer each month that I was only a year ago.

Who is taking a loan out that is 9 times there (joined) salary - that is ridiculous.

Many thanks Most of these bodies..the sky is always blue and the glass is always half empty.. all part of the HOPE/DOPE/Soap.syndrome

Rightmove asking prices 😂 Almost as big a joke as zooplas predicted prices based only on geographic averages. Both make their money on a lively housing market so of course no hidden agenda 😂😂😂

#RightToHousing #BanPrivateBanking

I have also noticed in my area that sold house prices were in range of 450-500k in 2021...now houses in the same street & adjoining streets are looking for 650k (after reducing from 700k)

One factor is the rising number of outstanding mortgage payments (about 75,000 mortgages affected as at Q1 of 2023). At some point, the lenders will be forced to take repossession action, and then dump these houses at fire sale prices to reduce their losses. Does anyone have any data from last time about long lenders are likely to wait before doing this.