The UK’s House Price Correction has only just begun.

mhwc.co.uk
The house price “correction” if you want to call it that, is only just getting started.
The “corrections” being applied will include correcting for:
1. 12+ years of artificially low interest rates
2. The effects of £1trn of QE now being reversed
3. The unwinding of the effects of Help to Buy on wider house prices (c. 20%)
4. The effect of the Covid Cash handout property party (now the hangover)
5. The now-popped Buy To Let bubble
On top of the corrections, (not to double count anything) we also now have:
A failing economy
Rising joblessness
Unmanageable government debt levels
The “10% correction” expected by “respectable institutions” will prove a woeful underestimate.
Whether they know they’re wrong and are deliberately understating it, or they honestly believe it and are just crap at their jobs, I don’t know.
If my 3 year peak to trough -35% estimated average nominal price fall expectations turn out to be anywhere near correct, I realise this means an unimaginably different future for many people who are relying on that not happening.
People relying on house prices for their pension, for their care costs, for their family.
I may be wrong, of course. Maybe prices will only fall 10% (they’ve already fallen further, just not yet reported) and everyone can have a good laugh at my expense.
But if you are someone who can’t contemplate anything worse, I encourage you to consider the possibility I’m right, and ask yourself what, 3 years from now, you would wish you had done today with this information.
Especially if your family’s future depends on it.

[@RustyVanDoor]

BBC reports 40 thousand businesses at risk of going under, estimated by them having CCJs of over 5k against them. The shit show just got started.

[@andrewtaylor6737]

Thank you, Sir! I've expected this to happen years ago, but better late then never. Some people are still blind Charlie, but they will wake up - eventually!

[@_permanence]

You forgot the emerging bond crisis causing pensions to crash

[@Commonsensenotsocommon]

A 2bed house in north London next to me went for 425k ( asking price was 525k) last month. You can easily convert it into 4 bed 2bath house by adding extension and adapting the roof space.

[@toiletrollholder]

Some sellers and estate agents are in denial Charlie. Sadly the bungalow I want to buy has both of those. Vendors want to take a profit of at least 75k even though they only bought 2 years ago. They may get a cash rich buyer who doesn't mind overpaying. I'm a cash buyer but have walked away 😢. I'll look next year.

[@stevesecret4782]

Good on you. Let the market run out of idiots and then buy

[@jamiejones642]

Wait till youn see how many cheap houses come up in next year or 2 you done the best thing 😊

[@richardlongmuir8348]

It doesn’t matter how rich you are nobody likes to be taken for a mug……….it’ll stick,stick,stick

[@mduffy4861]

You dodged a bullet. Well played fella. 👊

[@jungleboy1]

same. Annoyingly I'm now dealing with good properties not being listed and the few and far between ones sellers asking for more than sold a year ago.

[@graczmisiek4131]

My last comment was deleted. Telegraph hid their "Property" main tab. It used to be there to pump the prices and when the news turned bearish they removed it.

[@joecurran2811]

😂

[@elizabethnajderek9654]

Thank U Charlie.

[@MJ-YT-USR]

The more prices drop, the closer we move to a default death spiral when people find it impossible to mortgage and re-mortgage and don't want negative equity. This is what happened in the US in the Financial Crisis, and in areas like Detroit the average house price was suddenly in the tens of thousands, not the hundreds of.

[@ZazenDersim]

Great information, Thank you for sharing !

[@claraboomday]

Very Regional...in the West Coast of Scotland most prices of 2 bed flats are the same as 20 years ago...there was no boom...i do think Burnley/Hull/Grimsby/Hartlepool etc wont be affected much but if your in London/Bristol/Brighton/Edinburgh etc its going to be rough ride ...

[@markmewordz6860]

You forgot to mention the really bad economic news

[@noelineclancy2671]

Thank you Charlie you are a Star ,

[@user-mm5lh5lx1h]

You missed banks no longer willing to give financing to United Nations carbon emissions D grade or below for residential property....that's 15% or current UK housing

[@Michael-fg8cd]

For house prices to plummet with all the devaluation of currency that took place, things will have to get alot worse. Im hoping for the latter because the uk would become a living hell

[@chrishart8548]

It is going to get a lot worse and it will be a living hell. I'm sure literally everything is double the price now except wages. We're absolutely screwed

[@Michael-fg8cd]

@@chrishart8548 Usually a solution finds its way naturally or it's forced. Hopefully it's that because the uk has become a more dangerous place and is unpoliced.

[@268dar]

@@chrishart8548 Wages are now rising faster than prices

[@iantustin1983]

Spot on again Charlie. Those words really do bring things into focus.

[@Car_Porn]

Charlie is the real MVP Salute you sir tryna save ppl loosing money 🫡🫡

[@chrisgermann6658]

prices might be dropping but lenders are just as tight as ever.

[@chrishart8548]

That's what will keep the prices falling .

[@richardlongmuir8348]

True,I heard that lenders are stress testing for interest rates at 10%,so affordability is being hit again

[@teddyb4957]

Maybe on 'New' business, but if you re-mortgage with the same provider you don't have to be stress tested again@@richardlongmuir8348

[@KingShaf7]

It’s only just begun since at least 9 months ago……. will be nice when it actually does begin Like a few, I thought it would be at least a good few months in by now but I’m just not seeing it at the moment

[@stephfoxwell4620]

The House price correction began in June 2022. It will last at least three years. 12% falls in total headline price. We are about 7% down so far. But London it started sooner. London should be moving again by next summer.

[@SuperBadger1983]

this is akin to charlie telling you your wife is having an affair over a year ago. you didn't listen. fingers in ears. Now he's narrating her bedroom antics with her lover, whilst you witness the demise, quivering in the wardrobe like a helpless, passive-aggressive simp

[@andrewtaylor6737]

Love the analogy 😂

[@Longinus-fe9tu]

I need pictures.

[@richardlongmuir8348]

😂😂😂😂

[@OneLessCar]

If he was also your wife's pimp this would be true.... Follow the money.

[@HalesowenLocksmiths]

People are still buying houses around my area, and lots of reductions but nothing huge. Plenty of people are unable to sell because buyers are unable to sell. We are going on the market soon, so will be interesting to see what's going on! I think you will see a long stagnation of the market with steady decline, the crash just doesn't seem to be coming. There are just always more people looking for somewhere to live, than there is housing stock.

[@annieanonymous611]

Don't think the last sentence is correct there. There is enough housing stock, just not at the right price for many people to be able to afford.

[@MovingHomewithCharlie]

Never a crash, always a slide over several years.

[@chrishart8548]

​@MovingHomewithCharlie when people see how house prices are only going one way they won't be so keen to buy.

[@davewright9312]

It always bounces back...bought my first house just before interest rates hiked to 15% in the early 80s ....prices dropped for a while..4 years later sold the house for 250% of what I paid for it... Only advantage then was we didn't have all of the doomsday brigade posting online

[@chrishart8548]

@@davewright9312 thing is now we have a whole generation being paid crap money. And many are even carrying student dept. I think it's 2 trillion and will rise to 10 trillion. Problem is when they get into jobs we won't even pay them enough money to pay the loan back. The ponzi scheme that's running right now is completely unsustainable.

[@twenty3_co_uk]

Charlie... Add on to the fact that Taxation of the wealthy will increase under labour. Which will be a good thing for all. Housing for living and not for profit.

[@Longinus-fe9tu]

Wealthy will just move abroad to avoid UK taxes. As they did in the 1970s. Labour never learn.

[@twenty3_co_uk]

@@Longinus-fe9tu yep, I lived 10 years in Dubai. 03-13. But it is very easy for the UK government to start to Tax overseas income.

[@kevoreilly6557]

20% correction - after that, interest rates drops; income continues to rise at inflation rates ; immigration remains high; housing build remains lows :!5-7% growth 2025-2030 Anything else is wank

[@Rahul-oy4bp]

Don't Estate Agents feel burdened showing the properties for 6 -12 months that's not getting sold. Why don't they slash the prices and get some money out of their inventory. Every new properties to the market will be 10% plus above the 2022 price and then it gradually falls 2-5% and then again falls some % and still remain unsold or get under offer and back in the market. At least it cost them to go to the properties and show. And they do this for months.

[@MovingHomewithCharlie]

Because it's the seller's decision whether to slash the prices or not. Agents wish they could

[@harjbachra24]

Work it out mortgages were only given 3 and half times your salary which was the norm . Banks have been cashing in on this house price inflation.

[@OneLessCar]

Yes and now you have interest only mortgages, 40 year mortgages, mortgages to the age of 75 years old, part ownership etc. The market is no longer so simple.

[@muzzer8869]

Zero change its grim ive gave up myself and stuck in private renting. We r average income family can lend upto 160k with a 10% deposit and not 1 single house can view in half decent area.

[@Samuelioi]

What's your thoughts Charlie on Martin Lewis wanting to change LISAs due to house price growth? He's encouraging the news for buyers to borrow more as opposed to house prices becoming near reasonable pricing for FTBs.

[@thesupergreenjudy]

The issue martin lewis is having with LISA's isn't the house prices per se. He just accepted the fact that they have risen and the that the LISA can't keep up. People who had to buy a more expensive property than the LISA allows or withdrew the money because they realised they can't find a house within the LISA's requirements, were fined and got back less than they put in. Of course, people could just sit it out and wait for house prices to fall, themselves

[@kazymich]

So should I sell house now or in 3 yrs do you think house prices will climb again after 3 years. I've only got 7 years left to sell house before interest only mortgage ends with no prospects of increasing it

[@MovingHomewithCharlie]

I’m not expecting any chance of house prices rising in the next 3 or even 5 years.

[@rakeshmehra3657]

I got a house worth 250k at least no mortgage btl and 300k cash in bank. The only house I can see around worth buying near me is a 550k reduced from 675k 6 bed which is not selling. I keep thinking I should sell my btl and combined with my cash saving buy the 6 bed house as not sure if it would slide much more?? It was sold for 270k in 2006

[@realest-12]

Mortgage free on a £400k property and £350k in bank, yet still hard to move

[@rakeshmehra3657]

I put in an offer for a detached house in west bromwich west mids at 330k v large garden. It seemed less than other houses but no sure now if I am timing market wrongly

[@OneLessCar]

Don't try to time the market. Find the right house at the right price for you and get on with it. If you are looking for a long term place to live get on with it.

[@richardsmith7211]

In West Brom I’d offer 270k tops for 330k you can go Halesowen the better part of great Barr etc

[@rakeshmehra3657]

Great barr way more exp. 4 beds for 400 to 675k.

[@leetowers5668]

Where did Charlie go? Hes MIA! You ok over there Charlie?

[@MovingHomewithCharlie]

👋🏻

[@royaloak5455]

So what if house prices have fallen (and by a lot more once you adjust for inflation which most people don’t) the increase in interest rates haven’t made them any more affordable for first time buyers.

[@MovingHomewithCharlie]

Agreed. But when they have finished falling, they will be more affordable

[@stevegeek]

Just had offer accepted on a 1 bedroom mid terrace house in Surrey, BTL investment / cash buyer. Asking price was originally £260k, then £235k. Seller accepted £220k. Should rent for £1100 pm. How does that sound?

[@twenty3_co_uk]

Long term good. But if you have a job and earn good money. Half of your income will go in tax

[@stevegeek]

@@twenty3_co_uk Good point. This was a consideration. I’m about to semi-retire and my wife will be the owner of the house, so tax on rental income will not be an issue for me.

[@teddyb4957]

OK assuming that you have a 1 month void per year, have Insurance/maintenance costs of 10% [£100 pm] your yield would be 5%, you can currently get the same on a money market fund. Consider that property prices are only going in one direction in the next 2-3 years, the potential for non-payers [and cost involved in repossession], the lack of liquidity of property, and the missed opportunity of investing the same money in stocks/shares, then as an 'investment' this to me doesn't look idea. In fact if you look at property as an investment over the long term the returns are poor [and inconsistent] compared to the stock market, and are 'on par' with holding gold; the latter has the advantage that you can sell it immediately. Finally, capital gains on property have 'been and gone', that 'ship sailed' in the last 12 years of ultra-low borrowing rates, and as things revert to a norm over a mid to long-time scale, then those 'cheap' 12 years below average have to be 'balanced' with a period of rates above the average; where we are now and will continue for some time.

[@stevegeek]

@@teddyb4957 I have my workplace pension invested in the the stock market and gov bonds, plus a defined benefit pension from a previous employer, and several years of maxed out S&S ISA, so investing in property seems to tick the box for diversification. Let’s see what happens in coming years.

[@268dar]

This may all be correct but I can equally list a host of reasons for a softish landing: high nominal wage growth, high employment, few distressed sellers due to mortgage stress testing, the miserable rental sector pushing FTBs to buying etc. The point is no-one knows!

[@268dar]

This is a circular point. If there is a deep recession there isn’t a soft landing. If there’s no recession or just a mild one there’s a soft landing. Look at the US economy which is a long long way from recession (very strong Q3 GDP growth and a strong labour market) despite forecasts of doom for well over a year: at what point is the soft landing recognised?

[@claraboomday]

Very regional...in Irvine in the West Coast of Scotland...we never had the boom that the South East had...I bought a 2 bed flat for 66k in 2004...19 years later it's still valued at 66k Hope there is a soft landing for my S/E friends...hold on to your hats!!!

[@MovingHomewithCharlie]

nominal wage growth is meaningless, only real wage growth makes a difference

[@268dar]

@@rocko-sh5wi Yeah the US economy is doing better than the UK though the bond markets are similar as the Fed is more hawkish than the BoE. The housing markets are different as US mortgages are long-term so no-one is moving which has continued to push up prices. If we do enter a severe recession there’s an obvious stabiliser in lower interest rates. Few expect central bank hawkishness to survive a severe downturn.

[@268dar]

@@MovingHomewithCharlie You’re saying nominal wages are irrelevant to nominal house prices? Where did you read that?

[@MJ-YT-USR]

Based on historic interest rates and price-to-earnings ratios, I believe a 15 % to 23% drop in house prices is likely. It's then a question of whether such a drop (say 19%) triggers a complete crash.

[@OneLessCar]

Except earnings are starting to close the gap and there's still a lack of supply. Unless the job market tanks prices are not going to crash.

[@liamo8932]

Winelad says otherwise. He goes through all the data in the latest video on his channel.

[@MovingHomewithCharlie]

Winelad. Sounds like a level headed, analytical bloke 👍🏻

[@timwoodger7896]

@@MovingHomewithCharlie😂

[@philipdeacon5186]

Winelad will be eating humble pie next year when all the data filters through

[@paulkeenan2691]

Charlie is a like a Dr who gives you false hope to about a loved one whom is dying from cancer- we are desperate and unfortunately the rich are getting richer and their cash has to go into something thus sustaining pricea from massive crash and the poorer will be desperate to accept the 50 year morgages.

[@MovingHomewithCharlie]

Everything I do and say is based on an underlying view that being prepared for the worst and hoping for the best is a good life strategy.

[@teddyb4957]

Whilst not wanting to necessarily support Charlie, you haven't really thought through your thesis have you?...ask yourself "Who are the people likely to get these 50yr mortgages in the future?"...Those with the ability to pay current inflated prices = those with earning potential = those with qualifications...the very same people who have student loans to pay off, and so IF they were offered a mortgage when they graduated at 21 they would be 71 before it was paid off...with current inflated prices how likely are these same people going to get a sufficient loan AND pass the stress test?