The Housing Market 'Crash' Just Took a Weird Turn

[@MattBrighton]

Rightmove data is indeed asking prices, so might not be reflective of actual house prices. It does feel like sellers and estate agents still a little in denial at prices. Will analyse once next month's HPI data is released for official sold prices.

[@sonicwingnut]

Yeah was gonna say our house was up for £150k which seemed about right for the kind of house and area (3 bedroom semi in the North East), but we put an offer in for £140k and it was accepted. We probably won't close on it till about March so that price drop won't filter through into sold price data until then. We did see some ridiculous asking prices though, especially on 3 bedroom houses. Rents are still crazy with a 3 bedroom semi in the same area at around £750-800.

[@user-gz6tx6yp3v]

On my street 3 bed semis went up from £370k in October to over £400k in January and with so few on the market they sold in a week. The areas that will be affected are ones which are new areas with lots of new builds, but well established areas with no space to build near parks, schools and amenities will not only not crash, but they will continue to appreciate.

[@DTL0VER]

@@user-gz6tx6yp3v I think this all the time

[@alicemendoza5269]

The fact that there is already an enormous quantity of demand ready to absorb it makes it less likely to occur that way despite everyone's panic and crash predictions. This was not foreseen in 2008, at least not by the general public, as I'll explain below. The preceding response mentioned that the ownership rate reached its peak in 2004. Our current level is the median, having previously peaked in the second quarter of 2020. From 2008 to 2012, it fell by 3%, and by the second quarter of 2020, it will be 65 instead of 68.

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[@darnellcapriccioso]

Great video! For 2023, it’s hard to nail down specific predictions for the housing market is because it’s not yet clear how quickly or how much the Federal Reserve can bring down inflation and borrowing costs without tanking buyer demand for everything from homes to cars.

[@maiadazz]

There is no greater freedom than handing back the key to a airbnb apartment knowing someone else has to maintain it. If you enjoy renovating and decorating then perhaps home ownership is for you. For me, property is another way we get tied down and outside of exceptional cases I'd rather invest in Stocks/REITS to get exposure to real estate and other investment opportunities.

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[@hadid1092]

Excellent analysis as always. Just one request : can you please mention figures for UK minus London and figures for London when you're talking about house prices/affordability . The difference is so big it sometimes feels like we're looking at 2 different countries. It makes it more relevant for everyone.

[@FrazzyNZ]

Honestly from the perspective of a kiwi in New Zealand, 18% isn't far enough imo. Our house prices have almost tripled over the past 5-10 years. They need to come down. But this is bad news for people whom have bought their first homes in past couple of years leading to now.

[@tomyoutube214]

Rightmove data is asking prices, so the real January Halifax data may still show a drop

[@paulransome7156]

Just a point, Rightmove is asking prices not sale prices or even agrees prices like Halifax etc. agents have been delisting fallen through sales for higher prices to offer discounts and hopefully still secure the original asking prices.

[@SkamGame]

10% sounds very conservative and almost like an attempt to cushion the crash....

[@MrLockie7]

Around where I live lots of the 'new' properties (£300,000 ish) on Rightmove are just being re listed with roughly £25,000 - £40,000 reductions already. I'd say the 10% crash has already happened for proactive sellers who are actually serious about selling. All these forecasts seem so out of date with the current situation. All seem to be reporting as if it's still 3 months ago.

[@Paul-zu2he]

Asking prices are irrelevant

[@rdtheskald]

Nah, the sellers are just delusional! People won't be paying the asking price. There's also so many houses that have been on the market forever and I only see them and nothing new everytime i check the market. They are not willing to accept and lower the price and nobody will buy. The crash will come!

[@JG-fg1ye]

Literally all data is against you on this, long term and mid term

[@bavskijt]

Keep dreaming

[@midlifecarsis6420]

Lol. Sounds like Reality Check needs a reality check.

[@_permanence]

Rightmove probably take asking prices, so no wonder they say prices are slightly up as sellers and agents are likely deluded. Selling prices might show a different story

[@Jason-hl8uj]

@Health is wealth trying to rinse every last drop of blood before the P60 takes a serious hit

[@MattBrighton]

Very true - Sellers still don't seem to have accepted prices are going down.

[@krissteele6867]

@Health is wealth completely unfair. In the most recent survey of agents, they accept themselves there is a fall in prices but cite sellers reluctance to lower prices. Its barely their fault is it?

[@Samuels691]

Agreeed! People need to stop overpaying for some of these houses... Not touching any of these properties at current prices with a barge pole. A lot of trash properties going for half a million is beyond me.

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[@aidan9196]

You have to consider supply as well we still don't build enough new homes to meet demand. We are seeing a shortage of rental properties too which may fuel investment from landlords pushing demand up.

[@martinattwood7801]

This guy has no clue . Listen to moving home with Charlie. He knows the market better .

[@tomsko567]

Great video, much more realistic than all the scare mongers, thanks

[@Witnessmoo]

Bro I had a nightmare I had to sell my properties and I had to sit on a pile of cash… terrifying. Imagine holding a bunch of paper with pictures and thinking you are wealthy 🤮🤮🤮 Wealth is assets that other people need! The paper with pictures is just make belief nonsense we use to facilitate exchange of things that actually constitute wealth

[@garethedwards2883]

I would take out a 2 year fixed for now and reduce the stress of any interest rate increases.

[@natalieharrison5202]

I managed to be really clever with my mortgage and salary in the past year. I've leveraged a 10k payrise in 1.5 years as I changed roles and then companies and my 1st time home is 17% of my salary. Could you adjust this for rents to see what's happening there???

[@joshualangdon105]

Excellent video. I've just taken out a new mortgage at 4.99% 325k w/ 50k deposit and I've locked in for 2 years fixed. Such a hard decision, but I'm hoping the estimates of the rate falling back in to the 3/2% range by the end of 2023/24 are correct and I'll be ready to take advantage at the end of my term!

[@user-gz6tx6yp3v]

The thing is borrowers have been getting stress tested at 7% and even 8%. Like rent, people may not like paying it, but they can and they need to because we all need homes. Coupled with lack of supply, high immigration. There will be no crash.

[@anthonyfaucy2761]

Exactly. The lack of supply and government assistance will prevent any crash. The government just pays the mortgage with a loan here that the buyer has to pay back with interest if someone has lost their job. There might be a correction but there won't be a crash. If anything prices will jump through the roof next year

[@user-gz6tx6yp3v]

@@anthonyfaucy2761 I know people trying to buy houses now and they are getting out bid.

[@anthonyfaucy2761]

@@user-gz6tx6yp3v I'm in the process of buying my first home and doesn't seem many buyers. Its a new build as well and have essentially been told its reserved for me for a week. Going to see the sales advisor in a few days to discuss

[@krissteele6867]

Complete fantasy

[@user-gz6tx6yp3v]

@@krissteele6867 Yes I agree, a crash is a complete fantasy.

[@oktfg]

New build sale prices will increase, or house builders will slow construction to squeeze the market. Today’s new builds are being built on plots housebuilders purchased around 3 yrs ago. U.K. builders usually operate 3 yr land banks of unimproved land. Building higher density developments may allow reductions but most builders are sitting on expensive land atm. Lower land values won’t feed into the system for another 2-3 yrs.

[@TheSmokingGunmen]

I always take anything right move say with a pinch of salt. They always talk the market up to be better than the reality. Its in their interest to do so. Great content by the way

[@amani5161]

Always happy when your videos come up. Best explanations around by far. Really clear and easy to follow. The graphs always add an extra level of understanding too. Great researching and analysis. Really well done. 👍🏻

[@yevyerm]

An excellent analysis. You graph about income to house prices ration proves that all the claims that "in 80-s we saw IR going up to 15% and why are you moaning now" do not have any substantial grounds

[@livviloolah]

40% of household income being spent on mortgage alone is insane. from that data, was 40% an average amongst first time buyers, or was it up to 40%?

[@jacekk1141]

Don't look at standard variable - but on the tracker which is considerably lower than fix. Tracker is NOT the same as Standard Variable or Discounted and therefore should be seriously taken into consideration.

[@MattBrighton]

Trackers are definitely worth looking into!

[@adamfeatherstone5887]

Basically if your on a fixed rate around 2/3% for the next 12-24 months pay as much off you mortgage as possible to lower your interest you pay on a higher rate 🤷🏻‍♂️

[@commuterbranchline8132]

The amount that first time buyers can borrow has decreased, so they have evaporated. Inflation is realistically closer to 15%, 2 million fixed rate mortgages due to end this year so many won’t be able to afford to stay in their own homes. We could see real readjustments in excess of 20% as the market is flooded by those forced into attempted sales or repossessions as the scramble begins.

[@arandmorgan]

The reason it's going up is the building firms are reducing production, this creates scarcity and increases value. It also puts lots of people in a situation where they might not have a place to live. Hurrah

[@BatlerGaming]

Not entirely accurate to say that SVRs will definitely be over 7%. It's set by the lender and isn't tied to the base rate. Lenders may not increase their SVRs next time the base rate goes up. There's some incredible base rate tracker products out their right now at less than 0.5% above base rate and they also have the option to swap to a fixed rate for free in the future. Might be the best bet for some people who are willing to gamble on rates reducing towards the end of the year

[@tonycullen5415]

You're missing lots of points here. buy to let landlords are selling because or raising interest rates.This will flood the market, ergo, dropping house prices. Why did you not mention interest only mortgages? Some lenders will let you do this in times of trouble. You can vastly reduce your mortgage payments until it becomes more affordable again.

[@wyntog]

I'm seeing lots of previous rental properties coming on to the market. You can generally tell as they have no chain and dated kitchens and bathrooms.

[@Jules_Pew]

The number of transactions in any month is a better indicator of where the market is going. Chains longer than 3 months isn't great either, and currently the national average is 6 months.

[@RabJ208]

Great upload!

[@jimmydavis7587]

rightmoves asking prices only take into account new instructions and completely ignore price reductions so it's a very skewed result

[@SJ-cd4gx]

Thanks for uploading! Really appreciate it 👍

[@JJ-wd1wk]

Great video and well presented information. Thank you Matt

[@AM_o2000]

Matt, your analysis is muddled. First of all, you're omitting to consider that lead time from sale agreed to sale complete is currently around six months and then the data takes some more time to end up in official reports, so the interest rate hike after the mini-budget won't feed through into sold price data until March or April this year. Secondly, as you acknowledge in your pinned comment, there's no point in looking at asking prices. They reflect sellers' hopes. The gap between the average price of a property on Rightmove and the average sold price is in the high five figures. Thirdly, in real terms house prices have already fallen more than 10%, and it's real terms that matter.

[@MattBrighton]

The banks data ia based on their mortgage data so a slightly earlier view of sold prices without having to wait 6 months for land registry / ONS confirmed stats which is helpful to look at broadly what's happening. But at least is a good indicator, albeit not a like-for-like way to compare the data. Likewise with asking prices, it isn't a like-for-like but it's interesting to look at it contextually

[@StevenXuerebHaber]

Thanks for this info. I opted for a 2 year fix which is marginally higher than a 5 year fix, in the hopes that rates come down further when I come round to remortgage at the end '24 / beg of '25. What's your hunch? Thanks

[@monkeytennis2482]

latest Rightmove data isnt even 'asking prices', its 'new to the market' asking prices

[@jimmydavis7587]

any predictions for the scottish market Matt?

[@moniqueabundance]

Great video. Thank you

[@High.Vibe.Living]

Prices are coming down BECAUSE of the interest rate rises. Because it has taken a lot of the higher LTV buyers out of the market therefor reducing demand and increasing supply. So I welcome the interest rate rises.

[@GraceMarieBarry]

I’m in Australia Melbourne and the demand here is insane! Rents have gone up by almost 100$ a week in my area since mid pandemic, I don’t think the aussie ‘crash’ will last long if it comes at all. Great video Matt I love your channel, bit of home for me! 😊

[@ojlbrickwork8092]

Wish I was Australian :(

[@GraceMarieBarry]

@@ojlbrickwork8092 I’m British but moved out here in 2019! ☺️

[@tim.jenkins75]

wow... its almost like its a cycle...

[@user936]

You should get a New Zealand mortgage advisor on for an interview 🙂 see how it is working out over there.

[@cv2238]

A number of people have already pointed to the fact that you are comparing asking price to agreed price, which is like comparing the start bidding price and the hammer price to value something at an auction. Secondly, fixed rate mortgages are 2%+ lower than SVR, then SVR would have to drop more than 2% either very quickly (which you have already mentioned it is highly unlikely), or dramatically, which is also highly unlikely as the BoE base rate is not coming down. And you think you are giving people good insight??

[@sciencefliestothemoon2305]

I have a question, as the BoE rate ist now 4%, I would imagine the mortgage rates will be above that . And going by FED policy at the moment I would imagine the BoE is going to increase the rate again by .25 . So where are these predictions of decreasing rates coming from?

[@jassoh959]

Matt, variable rates are lower than fixed at the moment. It is only after 2 years of your mortgage they revert to 'Standard Variable's of the bank which was 6.99 % Inshort, if you get variable today that would be BOE rate + 0.75%. Is around 4.25% which is lower than the fixed deals available

[@mundokabaso9240]

That will be a base rate tracker product, not standard variable. I just started a base rate tracker 2 year product. Hopefully the Bank doesn't raise rates much further :)

[@anthonyfaucy2761]

@@mundokabaso9240 They will. 'You'll own nothing and be happy' - WEF

[@MattBrighton]

Trackers and variable rates are different products

[@kingofdeath5600]

Asking price!! That means nothing.

[@garyalexander8944]

Interest rates are at a record high? I think this needs some context, my mortgage rates was around 15% in the early 90's

[@MattBrighton]

The graph at 06:25 tackles this exact point in context of house prices and earnings now versus the 90s.

[@saltney17]

the tories are embarrassing

[@Ioria89]

How the fuck can I afford anything in London if a 1 bedroom flat in zone 3 cost £400k?

[@rakeshmehra3657]

And I complain about house prices in the midlands where we still can get 3 bed detached with big garden for 350k. After seeing london prices I won't complain anymore

[@Shamele55]

I have a remortgage coming up in June, and my crystal ball told me to go with 2 year fixed. Time will show if this gamble pays off

[@1292liam]

or 1 year tracker

[@ronthy321]

Hi Matt nice video. I have been watching yours videos while u such as great KZbinr . Would be nice if you could give me some idea ? We brought ours house in 2017 throught help to buy 20% loan . now the market will decrease should i paid off the 20% equity loan and sell my house later in thrid quarter 2023 as we are intended to relocate ? Or any other suggestion. Many thanks

[@LeeEverittProperty]

If prices drop then the amount you pay back will drop.... you could pay off some or all of the equity loan if/when prices drop then sell when prices are highier (which they will eventually). Seek professional advise before making such a decision and good luck :)

[@bluceree7312]

I would respect you but for the fact that you and your ilk are housing sharks (as bad as loan sharks). To you this is an investment (a luxury), a way to make money and exploit others. For the rest of us buying a house is something we do to live (a necessity).

[@FreaksSpeaks]

Inevitable Will happen.

[@Jay-xr3sb]

The price declines, rare hikes and transaction slow down happened during Liz Truss leadership, this won't show on land reg until march/april

[@ojlbrickwork8092]

300k house costs about 40k labour and materials rip off. Foreign cheap labour and cheap materials. I know this for a fact

[@Gjudxdkjyzddhjnr7091]

House prices didn't go up. Any analyst worth their salt should recognise the difference between asking prices and completed prices

[@asadhafiz6029]

People can’t even afford feed themselves market hasent gone up this is faulse

[@g.p616]

Why don't these house price commentators ever mention the most significant factor effecting prices the housing market? ...It's just weird! "Population growth"- net legal immigration to the UK last year was 500,000, thats half a million more people living in the UK than last year. The ONS say the average occupancy rate in the UK is 2.4 people per home. That means 208,000 thousand homes must be built last year year just to satisfy this demand. Did that happen? ...No; therefore the law of supply-and-demand says prices must rise. Matt: please discuss.

[@Air51]

Scotland + Rent freeze + war against landlords + no government financial backing of its tenants that can't/won't pay struggling landlords + possibly much higher interest rates eating up any profit = I'm now a property flipper!

[@anthonyfaucy2761]

You'll be among those struggling landlords soon. The greedy will suffer big time in this planned recession

[@Air51]

@@anthonyfaucy2761 I won't be a landlord because of this. Good landlords are needed to create great housing but the government as created a battlefield between tenants and landlords instead of working with landlords FOR their tenants. First tier tribunal is a joke too. If tenants and landlords could have immediate financial support for ANY missed rental payments, victimised landlords would be able to cover their mortgages and see their deserved profits for the BUSINESS they run. Equally, bad landlords should be exposed, shamed and compensate good tenants. The law needs to change in Scotland more than anywhere

[@anthonyfaucy2761]

@@Air51 Good. Landlords are plagues to society. Don't make out like they do good. They exploit a basic human need for their personal gain. So many times landlords have evicted families out of their homes because either they wanted more in rent which the family couldn't afford or wanted to sell it. This creates a rent economy where noone can buy their own home as all their income is wasting on rent. I remember there was even a landlord who evicted a Ukrainian family after receiving their 'homes for Ukraine' government payments. Landlords are scummy and evil. The solution isn't more landlords which will make society worse but creating more social housing. Too many profit seeking scumbags who want money for nothing. Landlords provide zero value and zero productivity while exploiting the labour of others. Its one good thing the government is actually doing getting rid of landlords in this country and long may it continue

[@matthewshipton9069]

Great video as a first time buyer wondering to jump in. One point though, the halifax index is already seasonally adjusted if you look at "december-2022-house-price-index.pdf".

[@mahon257]

We have to ask ourselves... who are the buyers? increasingly, the wealthy, that don't need mortgages... The Wealth Divide will continue to prop up prices..

[@reducepricroryhrywtby]

Nothing is for free either

[@philiprainbird1029]

Usual vested interest nonsense!!

[@93kwaj]

Bugs

[@SSJ2084]

Only 10%!!! How can that be right?

[@paulmessenger9836]

No sorry but inflation will last for the next decade and interest rates will decrease.

[@CaeRoberts]

Someone's bought a jumper from Costco...

[@tomcampbell9081]

Most importantly, people need to speak to independent whole of market Mortgage brokers and not get advice from KZbin on this

[@rakeshmehra3657]

Yep uk is rubbish these days way better in the 80s

[@1292liam]

it won't go down 10%. - 2 to 5%, max.

[@sarina5352]

👍🏼👍🏼👍🏼👍🏼

[@youcangetholdofjules]

Dude lose that mo. Now.

[@Calloffroz]

House prices will not go down 😂😂