Intelligent writing on UK housing market?

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rattle1299
Posts: 7
Joined: Thu Apr 13, 2023 3:57 am

Intelligent writing on UK housing market?

Post by rattle1299 »

Sorry if this is a little off-topic, hopefully it's not!

I'm thinking of buying a house, and I'm looking for well-researched, longform writing about the UK housing market. For example, I don't understand why house prices haven't plummeted as interest rates have shot up. Estate agents say a lot of stuff, but it's all about how the housing market is very robust and strong and how you should buy now (obviously) and I don't really trust any of it.

I don't particularly expect to be able to time or beat the housing market, but since it's much less liquid and (probably?) more driven by psychology and trends than, say, public equity markets, it seems possible that a strategy like "wait a few months, people take a while to adjust to new macro environments" would be correct. (I made that up, I'm not saying that that actually would be a good strategy)

I'd like to be able to read the FT or Economist or a good blog, if it was all about housing. Does anyone have any recommendations? Thanks.
Wannaretireearly
Posts: 4880
Joined: Wed Mar 31, 2010 4:39 pm

Re: Intelligent writing on UK housing market?

Post by Wannaretireearly »

Not just UK, but Bay Area housing too. Houses going for $200k over asking when rates are around 6-7%. Crazy stuff. Can only conclude it’s a lagging indicator.

Have houses ever been at a higher multiple of average salary in the UK? I dunno.

Economist was my go to decades ago. Perhaps talking to real estate agents you trust could give some inside scoop.
“At some point you are trading time you will never get back for money you will never spend.“ | “How do you want to spend the best remaining year of your life?“
tubaleiter
Posts: 247
Joined: Tue Mar 09, 2021 11:58 am

Re: Intelligent writing on UK housing market?

Post by tubaleiter »

The Economist does occasionally have articles about the UK housing market, in the UK section, and I'd assume FT does too, along with the other major newspapers (although those are the two I'd trust the most). Monevator frequently links to an article or two in their weekend reading.

But it seems like a difficult market to predict. I agree it's a lot less liquid, but the data is a lot more lagging as well, which makes it hard to tell what's going on. From a potential buyer making an offer until the sale price is registered with Land Registry can easily be 3+ months. The estate agents and banks get earlier data (seeing all the offers on their properties and then seeing mortgage applications), but those are only part of the story - only a subset of homes, and banks won't see anything about cash buyers (including overseas investors).

Lots of factors to consider, too - interest rates for sure, but overall inflation/cost of living, demographic changes, wages, increased working from home, and more. I just don't think you'll find anything that really helps you make a prediction, any more than you'd find useful predictions for equity markets.

But interested to hear other responses, as a current house seller and buyer it'd certainly be of interest!
fujiters
Posts: 548
Joined: Tue Mar 06, 2018 1:17 pm

Re: Intelligent writing on UK housing market?

Post by fujiters »

Matt Yglesias had a good piece on UK housing dynamics.

The upshot: prices aren't falling because there haven't been enough houses built in the last couple of decades. Supply (low) and demand (high).
“The purpose of the margin of safety is to render the forecast unnecessary.” -Benjamin Graham
MrJones
Posts: 775
Joined: Sat Mar 18, 2017 2:23 am

Re: Intelligent writing on UK housing market?

Post by MrJones »

Wannaretireearly wrote: Thu Jun 01, 2023 1:08 am Not just UK, but Bay Area housing too. Houses going for $200k over asking when rates are around 6-7%. Crazy stuff.
In the Bay Area, I'm told nobody wants to trade up (or down) a house at current interest rates since people are locked into earlier, very low interest rates. This means the high interest rate environment suppresses inventory, leading to higher prices.

Of course, theories are a dime a dozen and I have no idea how true this is, but sounds plausible. And checks out anecdotally.
halfnine
Posts: 2421
Joined: Tue Dec 21, 2010 12:48 pm

Re: Intelligent writing on UK housing market?

Post by halfnine »

For the time being, people aren't becoming unemployed at a rapid rate and the term of the fixed rate portion of their mortgages have yet to expire so people can continue to pay their mortgages and are in no rush to sell. At some point this may give. However, if the GBP goes down along with the economy foreign buyers often come in (London in particular) and keep prices from falling dramatically.
Valuethinker
Posts: 49032
Joined: Fri May 11, 2007 11:07 am

Re: Intelligent writing on UK housing market?

Post by Valuethinker »

MrJones wrote: Thu Jun 01, 2023 1:56 am
Wannaretireearly wrote: Thu Jun 01, 2023 1:08 am Not just UK, but Bay Area housing too. Houses going for $200k over asking when rates are around 6-7%. Crazy stuff.
In the Bay Area, I'm told nobody wants to trade up (or down) a house at current interest rates since people are locked into earlier, very low interest rates. This means the high interest rate environment suppresses inventory, leading to higher prices.

Of course, theories are a dime a dozen and I have no idea how true this is, but sounds plausible. And checks out anecdotally.
If it is like Boston or California in the early 1990s, this "stalemate" on house prices between buyers & sellers can go on for a very long time.

What tips it is personal circumstance: losing your job (and not being able to quickly find another), divorce, retirement, death.

So it will take a long while for this to go through. Depends how deep the tech recession gets - whether people are forced to sell.
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