London prices are falling as prices are so high. There is far better value to be had further north. London suffered biggest fall in a decade in April. Data is behind by a month or two so commenting is hard. A lot of people are wanting more space since experiencing a lockdown. And London flats offer little of that.
18-24 year olds are thinking of moving out of the city, which is a big change from past trends.
If furlough ends at the end of September as scheduled, this will kick in the unemployment rate. That will delay rises in interest rates. The same scenes are visible in many countries with businesses that have collapsed during the lockdowns pushing up unemployment. 95% mortgages are available still. The cap of unaffordability will eventually restrict a lift in house prices, he believes. This commentator is predicting a crash in prices. Interest rates will eventually rise and that will drag on house prices.
But, as he says, big money is moving in from the financial world to buy up UK houses and rental properties (as well as US and other countries). He thinks the stock market could fall at the same time as houses.
Yet why are banks buying up houses? They don’t usually back the wrong horse. In the US, banks are bidding up house prices to levels that ordinary people cannot afford. Could the same happen in the UK?
There is currently no inventory in the market in the UK (very few houses for sale), as he points out, which is pushing up prices. Yet is he right in thinking unaffordability will stop price rises, if the banks are starting to buy up houses?
The story could be that at some point interest rates will rise and people will find themselves unable to pay their mortgage combined with rising council taxes. The government will offer people a chance to sell their property to the bank, remove all their debt and they become tenants. That seems a more likely scenario, as the Great Reset progressively arrives.
A few people are buying expensive properties around and above £1 million with large mortgages. They can get fixed mortgages for five years, but could face annihilation when the fixed period ends and if inflation is kicking in. People should plan to pay off most or all of their debts over the five year period if they want to keep going as owners of their own house. Either that or be careful about taking on big debts this side of the Great Reset.
The commentator thinks that we are in an unsustainable bubble but is he right? This time the game could have changed and the bubble will go through the roof. The banks will make billions as usual and as people find themselves unable to maintain their ownership in a very different set of circumstances to those that have come before, where the commentator is looking for his projections.