UK House Prices have been FALLING for 5 MONTHS and are already DOWN 5% from their peak! The big question is where do we go from here and who is going to see the BIGGEST house price crash overall?
A UK house price crash will impact millions of people, but some will see larger house price falls than others. In previous housing market crashes, the size of the fall largely depended on the geographical location of the property.
While this is likely to be true if house prices continue to fall in 2023, I think new build properties are going to experience larger price drops than comparable existing properties. This is largely due to the fact they were overpriced when they were sold.
For more than a decade, new build properties have been sold at a premium (often in the region of 20%) largely due to the government backed Help to Buy equity loan scheme.
In 2021, Help to Buy was used in over 60,000 new build purchases – that is over 25% of all new build sales in that year. This scheme closed to new applicants in October 2022 and any outstanding loans must complete on a new build property by the end of March 2023.
When you combine the end of Help to Buy with increased mortgage costs, high inflation and house prices already falling, it is very very difficult to see where any new build demand is going to come from.
Large homebuilders such as Taylor Wimpey, Persimmon and Redrow are already reporting lower demand, more cancellations, and price reductions.
What do you think? How much will house prices drop in 2023 and will new builds / large property developers be hardest hit by this housing market crash? Let us know in the comments below….(read more)
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The UK housing market has been booming for the past few years, with prices reaching record highs in many areas. However, the recent economic downturn has caused many experts to predict a major house price crash in 2023. This could have a devastating impact on homeowners, investors, and the economy as a whole.
The most vulnerable group in the event of a house price crash are likely to be first-time buyers. Many of these individuals have taken out large mortgages in order to purchase their first property, often stretching their finances to the limit. If house prices fall, they may find themselves in negative equity, owing more on their mortgage than the value of their property. This could lead to difficulties in finding a buyer for their property, or even in meeting their mortgage repayments.
Investors are also likely to be hit hard by a house price crash. Many investors have taken out large loans in order to purchase multiple properties, with the expectation that house prices will continue to rise. If prices fall, they may find themselves unable to repay their loans, and could be forced to sell their properties at a loss.
The wider economy could also suffer if house prices crash. A fall in house prices could lead to a decrease in consumer spending, as people become less willing to take out loans and mortgages. This could have a knock-on effect on businesses, leading to job losses and a decrease in economic activity.
It is impossible to predict the future of the UK housing market, but it is clear that a house price crash in 2023 could have a devastating impact on homeowners, investors, and the wider economy. It is therefore essential that the government takes steps to ensure that the housing market remains stable, and that those affected by a crash are protected.
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Fingers crossed
How much does it actually cost to build a house ? During the mid 1990s Crest built an estate next to where I lived in South Hampshire and were selling two beds for £60000 each. Actually the last complete "green field"" estate I can think of being built locally. To get planning permission they had to replace about 1/2 a mile of country lane with a decent quality road. While I would imagine profits were low I doubt if they were selling at a loss.
p.s. To give an idea of what happened to the ten year old houses where I lived I bought 1989 £65500, Best offer 1995 £48000, Sold 1999 £70500
Really insightful and spot on analysis
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House price inflation was 10% a year ago it is already down to 1.9. THAT IS A DROP OF 8.2%. Inflation is 10.2% but instead of going up by inflation houses have gone down by 8.2%. A drop of 18.4% in real terms. Repeat that next year they could be over 35% down in real terms. Interest paid on mortgages has trebled. My sons £180,000 mortgage has gone up from £800 to £1500. His gas and electric £100 to £200. Houses have already crashed 18.4% and anyone who does not get a 30% discount is a fool because with inflation and further drops they are going down by a lot more – I would say a minimum of 30%. I have been waiting for this for 26 years as I lost over 30% in 1997 when I sold (I was serviceman, got divorced and got drafted – no buy to let mortgages then – and lost £10,000 cash deposit. Scaled up that would be someone with a £300,000 thousand pound house losing £100,000 today. Also, the ONS HPI is a conman's Ponzi charter. They only include less than 40% of sales (factcheck that and tell the truth) in the initial monthly figure and then only include the percentage of sales that do not affect it that much – less than 80% and leave out all sales they think will make the figures look bad. Also, They include a new sale of one new house in three different monthly figures . It is a con and part of the Ponzi fraudulent scheme that they have run to make the rich people richer.
Oh dear I’ve just bought a new home. The surveyor did say the evaluation on it was correct though so I don’t know if that’s a good sign and it wasn’t on any help to buy or buy to let schemes.
I’m glad house builders will suffer, maybe it will stop them trying to land grab our green fields and stop them cutting trees down. There is a certain lack of infrastructure ( drainage, water supply, schools and public transport systems and GP practices in place to cope in rural areas. They should only be building on brownfield sites not on green belt. The government are even running roughshod over local councils.
House building stops population increases , the supply drops of a cliff are this guy thinks the house prices are going down.lol
Large builders won't suffer, they will just lobby for more schemes to maintain prices, because the majority of home buyers are financially unaware and ill-informed. Owning the new pretty home or status symbol is all they care about what ever the cost.
Surely your point about large house builders points to stagnant or increased house prices. Their material, wage and interest costs have gone up; so they'll probably just build fewer houses which will only contribute to increasing prices. The government borrowed £700bn since 2020, money which ended up in the pockets of the richest 5%, this will result in the rich buying more assets, and prices will continue to rise (unfortunately).
blimey Barratt were worth a punt at £27
Thanks bud for keepin us financially Educated! Regardless of how bad it gets on the economy, I still make over $22,000 every single week.
It’s all smoke and mirrors. Massive crash en route
Awesome news, been way overpriced for too long
The government have to house all these boat migrants, they will build huge flat blocks for them
"It's a good fing"
I think its going to be 15%- 20% from peak to trough, just the froth off the covid madness/stamp duty premium. The only people to potentially suffer a real terms fall will be those that bought in the past 2-3 years. Everyone else will be protected by built equity. It will still be much more expensive to borrow with the new mortgage rates, 4% will be the new standard, but people need to move so will adjust. IMO
In 2017, the CEO of Persimmon plc, Jeff Fairburn, received an annual bonus of £75 million thanks to the government's Help-the-Builder scheme. Government borrowing funneled straight into the pockets of private companies and their CEOs.
The Help to Buy Scheme was an abomination from the start. It didn't 'help' anyone in the long term apart from big developers.
Developers are building fewer homes in the current environment. This means less availability of homes. Homes available for rent and purchase are at a low currently. There will be a slight correction, but no crash due to demand. If brits can not afford to get mortgages, international investors will buy.
Author of this video- sold his house, because he was planning to buy another house, but seller refused to sell hence now author of those videos renting. All story was covered by himself in another videos 😀 the only one person who will regret most- is author itself.. because he is renting currently 😀
I was definitely subscribed to you and today it showed me as unsubscribed…? Weird!
Upcoming recessions aren't what they once were. Recessions of 40 years ago meant mass unemployment and folks losing their homes. Recessions of today mean interest rates pushed to zero per cent , existing home owners getting their mortgage paid after three months for thems out of work, and or simply making interest rate payments only.
Recessions are bullish for home prices. – the banking establishment and government know all the tricks to step in a prevent a fire sale.
I HAVE INCURRED SO MUCH LOSSES TRADING ON MY OWN…I TRADE WELL ON DEMO BUT I THINK THE REAL MARKET IS MANIPULATED… CAN ANYONE HELP ME OUT OR AT LEAST TELL ME WHAT I'M DOING WRONG ?
Some of these builders will also be exposed to the post Grenfell levy Michael Gove recently introduced, so another hit to their bottom line.
We don't hear anything about the government's FLS setup in 2012. The Funding For Lending Scheme whereby the BoE were allowed to buy mortgages from the commercial banks.
Hard to believe FTB are still active yet will loose something like £100k off the price over the next 2 years. This is the forth crash I have seen since being a home owner and will be the granddaddy of crashes considering the economy has just smashed into the buffers.
"Help to Buy" Overpriced asset with lifelong Debt! (40% in London!!") … government-funded subprime?
The con is that those new houses that sold during covid where entered three times on the house price index at a 20% over price premium. The government , Bof E and commercial Banks were all in the con together to ensure quantitive easing money made house prices go up. Biggest con in history and no-one seems to care.
800 pound per share. You mean 8 pound per share. It’s in pence.
U sold your house hoping for market crash. Instead you are filling videos trying to earn from u tube
Your wrong comparing the 2008 collapse. The banks/financial institutions didn't have the collateral in 2008 with the Government bailing them out. Now they have liquidity – they will look to snap up any equity held by homeowners if they default on their mortgages. In the 80's it was brutal and with this possible crash, fuelled by a cynical greedy Government, the lenders will have a field day! No more mortgage holidays it will be potential carnage for homeowners!
Was going to sell my house But if houses do go down might buy another house especially where i live 2 3 beds up for rent thats all rent on one 1800
Falling prices – it's great on paper. But I just don't think anyone will want to sell at the moment unless they have to.
Meanwhile in Scotland prices of new houses continue to climb. They sell like hot cakes. Sky is the limit.
Most recent comment from my sales agent “The market has picked up extremely well and there are currently more buyers than properties which puts you as a vendor in a very favourable position.”
The Government has a track record of throwing taxpayers' money at even the mere possibility of price falls. Charlie Lamdin (MHWC channel) believes that there is no money for the Government to throw at the problem this time. I'm not convinced that they won't find a magic money orchard to harvest given that there'll be a general election in 18 months time and things don't look great for the Tories even without a housing market crash. Any thoughts on this? (And yes, I'm aware that a video on the topic is promised at the end of this one.)