Brexit and house prices

[cricketfieldclarets]

When the whole Brexit 'thing' concludes, what effect do you think this will have on house prices in this country? Would you be holding off investing in a property beforehand or would now be the best time to buy another? Or does anyone see another crash?

Also what do you think the significant increase in homeworking will do to prices? I expect places like London, Manchester etc will probably see a slowing and maybe even drop in prices whereas houses in the sticks and even Northern commuter towns like you seen round London - Burnley, Tod Hebden, Halifax and suchlike will increase with links into Leeds and Manchester.

London was always big on the agenda for me, but I seem more averse to that these days. Value for money vs income potential (especially with flexible working) etc seems to have put paid to that in the main. Plus the City has changed dramatically and not entirely for the best. Agree with a lot of comments about London from this article a couple of years ago. (Although I do still love the place). https://www.theguardian.com/uk-news/201 ... use-prices" onclick="window.open(this.href);return false; I think you have to be extremely wealthy and / or mad to buy there now. Even businesses are seeing that with Media City moving to Manchester.

Its a question nobody probably knows the true answer to. But looking at my next move and a number of factors to consider.

[Indecisive]

I think Manchester is looking increasingly strong.

I've a couple of friends who are usually pretty shrewd, they have invested in a couple of nice flats in the city. They are living in them now , but when they are ready to escape the hustle and bustle, they plan to keep them and rent them out.

London seems a gamble to me. Maybe it's a bit late, and the stakes are obviously a lot higher....thats if you have access to the amount of money you'd generally need.

[Indecisive]

The brexit question is anyone's guess.

Are you looking at buying to live in, or buying as an investment?

[piston broke]

Apart from the odd blip London will always rise. i wish I could afford to by a small place there and just rent it out.
After almost 20 years of Homes Under The Hammer has anybody ever bought in London and lost money? Not in my memory.

[Sidney1st]

My Auntie got a place in London with her divorce settlement in the 90's and she's rented it out ever since.
I doubt she will sell it anytime soon either, just handy to have the money going into her retirement fund I think.

[ElectroClaret]

Apart from the odd blip London will always rise.

Yes, it will.
As it's population rises, a finite amount of space will always drive prices up.
The south of England in general looks a pretty safe bet.

[Sidney1st]

I know people who've lost money in the south of England outside of London.

[Woodleyclaret]

Woodley has gone mental with new build "starter homes "at the bargain price of £300,000.Teresa is MP for half our village .My half thankfully had a swing to Labour and we have Matt Rodda as our MP.However our houses are rising fast as Londoners bail and move to the Thames Valley.Meanwhile our £110,000 house in Nelson remains in negative equity

[ElectroClaret]

I know people who've lost money in the south of England outside of London.

Maybe, Sidney, but I don't think that will be the general trend, particularly in the future.
As Woodley points out, flight from the city will also rise prices outside the capital.
Probably not every property, fair enough, but the trend will surely be upwards.

[Sidney1st]

Yeah it is going upwards, the people I know lost in one of the crashes.

I'll never buy a house again, certainly not whilst I'm living down south.

[CrosspoolClarets]

Brexit is a red herring I think, better to think about rising interest rates as the historic lows since 2008 unwind into normality (increasingly viewed as necessary to boost real terms wages and savings).

I am expecting about 30% to come off house prices in real terms on a 10 year view. That is why I am about to extend and not buy a bigger one.

[Sidney1st]

Could be a large number of people who end up unable to afford their mortgage payments if they're on the wrong deal.

[Quickenthetempo]

The market will depend on buy to let and builders doing property up and selling on.

These landlords cause a shortage of houses to buy and drive prices up.

The golden rule to buying houses is to buy the worst house in the best area if you get it cheap enough for the building work to be cost effective.

[starting_11]

Got my 5 year mortgage done this week.

Interest rates will be thru the roof once we get brexit out of the way and investment comes flowing back in

[ElectroClaret]

Could be a large number of people who end up unable to afford their mortgage payments if they're on the wrong deal.

Spot on. And not just the wrong deal. If interest rates rise higher and faster than is
predicted, (which is a least a possibility) there'll be absolute mayhem all round.

[IanMcL]

Rental will become normal again.

[cricketfieldclarets]

The golden rule to buying houses is to buy the worst house in the best area if you get it cheap enough for the building work to be cost effective.

That is the best advice by far.

[cricketfieldclarets]

Are you looking at buying to live in, or buying as an investment?

Both but primarily to live in.

Can get value for houses round here, but then you sacrifice a lot too. Typically always close to a crap area.

Always had a thing for Hebden Bridge but you pay an absolute premium for even a terraced house. Despite the fact there are big flood issues. The area I choose next is as important as the house itself though.

While Ribble Valley is nice, it never really does it for me. I think there are better houses for much less in and around Pendle.

Trying to weigh up how close to Manchester (or far for that matter) I want to be.

[tim_noone]

Both but primarily to live in.

Can get value for houses round here, but then you sacrifice a lot too. Typically always close to a crap area.

Always had a thing for Hebden Bridge but you pay an absolute premium for even a terraced house. Despite the fact there are big flood issues. The area I choose next is as important as the house itself though.

While Ribble Valley is nice, it never really does it for me. I think there are better houses for much less in and around Pendle.

Trying to weigh up how close to Manchester (or far for that matter) I want to be.

The road towards Manchester via rawtensall you would get the countryside on your doorstep and to the city in half n hour. 15 minutes turfmoor .win win win!!

[WadingInDeeper]

The golden rule to buying houses is to buy the worst house in the best area if you get it cheap enough for the building work to be cost effective.

Done that twice now, but also bought at a low, in areas where i knew they would re-sell. FIrst time was about 20% profit, second time about 35% profit. Bearing in mind they were lived in during that time it worked out well.

Current house is a very long term project.

[cricketfieldclarets]

The road towards Manchester via rawtensall you would get the countryside on your doorstep and to the city in half n hour. 15 minutes turfmoor .win win win!!

Yep. Dont mind that area. Only thing is lack of trains. The bus routes good but cant beat the train.

[ElectroClaret]

Yep. Dont mind that area. Only thing is lack of trains. The bus routes good but cant beat the train.

They're on strike on Friday.

[cricketfieldclarets]

They're on strike on Friday.

So was the bus over Christmas. I say on strike. Waited for 2 hours in minus 10 conditions for the night bus. After a full day session. Only realised at 03:30 they only run Saturdays!

[basil6345789]

Disturbing that so many people are positive about the London vile, cesspit housing model that is thriving in ruined Manchester.

[Indecisive]

Both but primarily to live in.

Can get value for houses round here, but then you sacrifice a lot too. Typically always close to a crap area.

Always had a thing for Hebden Bridge but you pay an absolute premium for even a terraced house. Despite the fact there are big flood issues. The area I choose next is as important as the house itself though.

While Ribble Valley is nice, it never really does it for me. I think there are better houses for much less in and around Pendle.

Trying to weigh up how close to Manchester (or far for that matter) I want to be.

What about Todmorden? Trains to Manchester, easy trip back to the turf! Thought I'd read an article on houses there so had a google....

https://www.thetimes.co.uk/article/todm ... -8mbzg7xjf" onclick="window.open(this.href);return false;

[cricketfieldclarets]

What about Todmorden? Trains to Manchester, easy trip back to the turf! Thought I'd read an article on houses there so had a google....

https://www.thetimes.co.uk/article/todm ... -8mbzg7xjf" onclick="window.open(this.href);return false;

Yes read that article a few times.

I like Tod. Used to have a bad rep when I was at school for being a bit backward and insular. Ironic really coming from Burnley

Only thing that I don't like about Tod is how much some of it is in the shade of the valley. But I actually think its a decent place. Close enough to Hebden too but at a fraction of the price!

[cricketfieldclarets]

Disturbing that so many people are positive about the London vile, cesspit housing model that is thriving in ruined Manchester.

Not so much about the housing model. Although I dont mind apartments etc. Just that as an investment its a good place to buy by the looks of things.

Love London, but not what its becoming.

[ElectroClaret]

Tod station car park is always jammers if you're after the train.

Parking a nightmare if you don't get there early.

[Paul Waine]

Family house prices in London/inside M25 have been falling thru 2017. The stamp duty changes that George Osborne introduced, reductions for prices, approx. below £930k, and rises for prices above that level, plus the additional 3% to discourage second home buyers - and some buy-to-lets. It's expected that these price falls will continue through 2018.

Stamp duty, especially at the levels for houses above £1 million (an ordinary family home in London) is a "dumb tax." It is often much cheaper for home owners to extend - up in the loft, out at the side and the back, and then dig out a basement - rather than move to a larger house.

So what happens when lots of people do this:

1) builders are busy building extensions - so they aren't building new homes;
2) 3 bed houses become 4 and 5 bed houses, too big for the buyers lower down the housing ladder and to expensive for them to make the move upwards;
3) if it is expensive to buy a new home - and if buying a second home is penalised with extra taxes - people won't move to jobs in new areas.

(1) and (2) are making the dysfunctional housing market worse, they aren't helping to solve the problem.
(3) is harming the economy, shortage of well qualified labour where the jobs are, people underemployed In jobs they are overqualified for - which can also block the people below them moving up.

So, we need to get rid of stamp duty - and replace it with an annual property tax - land plus property. Give the people who have recently bought a new home and paid stamp duty a break for a few years and start collecting taxes from the people who've been in their home for many years plus all those who own land that is eligible to build houses on. The latter will get these "land bankers" building and go a long way to getting the housing market back into balance.

Last comment; all these people who want to invest in residential property, they've got to do something useful to achieve their investment gains. I'm all for people bringing poor quality housing back into use with refurbishment. But, buying and selling as if they are investing in bitcoin... no, that should be strongly discouraged.

[Joe Buck]

First world problems eh.

[CrosspoolClarets]

The golden rule to buying houses is to buy the worst house in the best area if you get it cheap enough for the building work to be cost effective.

I think that is spot on, I have two things to add:

1. Get builders quotes from outside the area too so there isn’t necessarily a “postcode inflation” applied by the thieving scumbags. Otherwise that profit may disappear.
2. Buy when house prices are set to decline (or are doing) because builders may be loathe to pay cash themselves in a bidding war, in that they want a quick profit not a long term one. Paying cash for a house when mortgage rates are highest is probably the best deal of all, the best investment is to wait and pile up the cash for such an opportunity.

[ElectroClaret]

Family house prices in London/inside M25 have been falling thru 2017. The stamp duty changes that George Osborne introduced, reductions for prices, approx. below £930k, and rises for prices above that level, plus the additional 3% to discourage second home buyers - and some buy-to-lets. It's expected that these price falls will continue through 2018..

And these price falls if they continue, Paul, will obviously encourage more people to buy, because they
can now afford the properties that have become cheaper. Then, as more people move in, these properties prices
will once again rise, (not enough of these houses) driving people out to the suburbs.

It's completely cyclical, but long term, the trend will always be upwards.

[yTib]

brexit is a disaster and surely it must be dawning on the most ardent leavers.

but maybe not.

[cricketfieldclarets]

Family house prices in London/inside M25 have been falling thru 2017. The stamp duty changes that George Osborne introduced, reductions for prices, approx. below £930k, and rises for prices above that level, plus the additional 3% to discourage second home buyers - and some buy-to-lets. It's expected that these price falls will continue through 2018.

Stamp duty, especially at the levels for houses above £1 million (an ordinary family home in London) is a "dumb tax." It is often much cheaper for home owners to extend - up in the loft, out at the side and the back, and then dig out a basement - rather than move to a larger house.

So what happens when lots of people do this:

1) builders are busy building extensions - so they aren't building new homes;
2) 3 bed houses become 4 and 5 bed houses, too big for the buyers lower down the housing ladder and to expensive for them to make the move upwards;
3) if it is expensive to buy a new home - and if buying a second home is penalised with extra taxes - people won't move to jobs in new areas.

(1) and (2) are making the dysfunctional housing market worse, they aren't helping to solve the problem.
(3) is harming the economy, shortage of well qualified labour where the jobs are, people underemployed In jobs they are overqualified for - which can also block the people below them moving up.

So, we need to get rid of stamp duty - and replace it with an annual property tax - land plus property. Give the people who have recently bought a new home and paid stamp duty a break for a few years and start collecting taxes from the people who've been in their home for many years plus all those who own land that is eligible to build houses on. The latter will get these "land bankers" building and go a long way to getting the housing market back into balance.

Last comment; all these people who want to invest in residential property, they've got to do something useful to achieve their investment gains. I'm all for people bringing poor quality housing back into use with refurbishment. But, buying and selling as if they are investing in bitcoin... no, that should be strongly discouraged.

Some good points well made. Agree with most if not all.

[cricketfieldclarets]

I think that is spot on, I have two things to add:


2. Buy when house prices are set to decline (or are doing) because builders may be loathe to pay cash themselves in a bidding war, in that they want a quick profit not a long term one. Paying cash for a house when mortgage rates are highest is probably the best deal of all, the best investment is to wait and pile up the cash for such an opportunity.

This is a decent point. But by saving money you are actually losing money in real terms, as the value of your money goes down the longer you have it. Typically at least.

[Paul Waine]

And these price falls if they continue, Paul, will obviously encourage more people to buy, because they
can now afford the properties that have become cheaper. Then, as more people move in, these properties prices
will once again rise, (not enough of these houses) driving people out to the suburbs.

It's completely cyclical, but long term, the trend will always be upwards.

Sort out, ie. get rid of stamp duty, and start permitting more house building and we might see that house prices only change with wages.

[cricketfieldclarets]

Tod station car park is always jammers if you're after the train.

Parking a nightmare if you don't get there early.

In the main most places are within walking distance of the station to be fair.

[Paul Waine]

This is a decent point. But by saving money you are actually losing money in real terms, as the value of your money goes down the longer you have it. Typically at least.

That was also my first thought: mortgage rates are highest when inflation is high. You need to achieve a better return on your savings while you wait to buy the house. Of course, you can always invest the savings in stock market, but shares are always better viewed as a long term investment, rather than short term....

[WadingInDeeper]

1. Get builders quotes from outside the area too so there isn’t necessarily a “postcode inflation” applied by the thieving scumbags. Otherwise that profit may disappear.

And learn to do as much as you can yourself.

Paying cash for a house when mortgage rates are highest is probably the best deal of all, the best investment is to wait and pile up the cash for such an opportunity.

Definitely, especially when a property has been on the market a while, its bizarre the way people change when they know there is no mortgage lender involved. No point paying interest to the bank either if you don't have to.

[Bfcboyo]

Apart from the odd blip London will always rise. i wish I could afford to by a small place there and just rent it out.
After almost 20 years of Homes Under The Hammer has anybody ever bought in London and lost money? Not in my memory.

You could buy a shoe box in London and make 150% in 6 years at the moment.

[tim_noone]

You could buy a shoe box in London and make 150% in 6 years at the moment.

You jest..but there was an old woman who lived in a shoe....

[LoveCurryPies]

World population is set to rise from 7.5 billion to 9.5 billion by the end of the century. Simply because people are living longer.

Sea levels rising will take 5% of the world’s land.

UK population will rise from 67million to 95 million...through a mixture of longer living and people forced to move to other areas.

Supply and demand means houses will be in more demand and the increase outstrips the government’s building targets.

However, more and more jobs will be automated so how the huge number of people without work buy a house is a mystery to me.

No doubt some Brexit voters think we will stop people coming to this country.

[Inchy]

I have always thought if I come into a bit of money where I can invest in property I would invest in a student area to rent out.

The following property is on the market for 160k http://www.rightmove.co.uk/property-for ... 57077.html" onclick="window.open(this.href);return false;

It’s a 4 bet house right in the Leeds student area. When I went to Leeds Uni I was paying £78 a week rent. There were 4 of us paying the same. Rent for students in that area varied between 60-100 quid.

If you manage to rent out the linked property To 4 students at £80 a week, it will return £16,640 a year

I know you will need decent insurance and a deep clean after each set of students leave but for that money it’s worth it. There is also the risk it doesn’t get filled but in my experience if you tart the place up with decent furniture you will easily shift it.


It’s silly money really. It’s only after I left Uni I realised I would have saved a fortune if I had just rented in another area of Leeds

[aggi]

There's a chance that Brexit will cause house prices to take a hit in London. It really depends how many jobs the deal costs and whether financial services take a significant hit. It isn't just the more expensive properties from those who work in the financial services, it's also the potential for jobs to be lost in the ancillary areas (sandwich shops, cleaners, etc).

At the moment the market seems to have plateaued, demand still outstrips supply but not quite to the same extent as it used to (probably due mainly to the increased difficulty in getting a mortgage), which keeps the prices high.

I bought a flat in London 7 or 8 years ago before the prices shot up. It's probably doubled in price now but the reality is that when I first bought my flat I needed another £200k or so to buy a house in the area, now I need another £450k or so which isn't going to happen (in fact I've ended up doing a loft conversion as Paul Waine refers to).

Until there is a bigger supply of residential property not much is going to happen to the prices. In the area I live there is a proposal to build 30,000 new homes in the next 20 years but the reality is that work needs to be done to make the UK economy less London-centric and spread the demand around the country.

On buy-to-let, it's certainly becoming less attractive now with the various tax changes (increased stamp duty, no offsetting mortgage interest, restrictions on claiming expenses, etc) which may lead to an increased supply of properties to buy.

[South West Claret.]

The latest Halifax price guide for what it's worth.

http://www.bbc.co.uk/news/business-42646711" onclick="window.open(this.href);return false;

[deanothedino]

It's a real mess at the moment. Someone has put about renting becoming normal again, isn't it already?

New build homes are too expensive for what they are as well but it would take a change in the governments thinking to start building new houses at a good price.

[Sidney1st]

Isn't it Germany where renting is the norm and has been for a long time?

It isn't really the government that are causing the problem, it's the Builders who're restricting the market on purpose to keep prices inflated.
There's large chunks of land kicking around waiting for houses to be built on them, but if they flooded the market with enough houses to match demand then the higher prices couldn't be justified.

[cricketfieldclarets]

I dont have an issue per se with renting if it offers value. How many people own anything these days like cars or phones etc. But reality is in most places it doesnt offer value.

[Bfcboyo]

Isn't it Germany where renting is the norm and has been for a long time?

It isn't really the government that are causing the problem, it's the Builders who're restricting the market on purpose to keep prices inflated.
There's large chunks of land kicking around waiting for houses to be built on them, but if they flooded the market with enough houses to match demand then the higher prices couldn't be justified.

I disagree. The hoops jumped through to scoop up valuable and profitable sell on new build land are worse than the final of ninja warrior.

Unless your Tim Webber of course.

[CrosspoolClarets]

This is a decent point. But by saving money you are actually losing money in real terms, as the value of your money goes down the longer you have it. Typically at least.

Sorry, a bit late to the party replying to this, but when house prices are surging (and thus we should delay buying), share prices normally surge too, so I would save in a stocks ISA, switching to fund a house later.