House Prices Are Going Up! But It Will Be Short Lived

Richel Bautista
September 29, 2020

House Prices will start to ease off

The spring bounce in house prices has been extended due to stamp duty which was great.
Now, we are going to see it starting to ease off because we are heading into winter and another potential lockdown.

Let's have a look at some house prices and hotspots I think you know house prices for me right now is that there's been there's always a spring bounce and that spring bounce was extended because the stamp duty which is great because normally August is slow August was quite good but now we are going to see house prices start to ease off.

And the demands start to ease off because we're heading into winter. We're also potentially into heading into another lockdown which is a whole other story but that's certainly not something we want but hey you know we'll see how we go there.

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Look, I think one of the interesting things I have this map. Now you can't probably can't read that map, don't worry about it. You don't need to read it exactly but effectively everywhere is going up and it has been going up okay and these are figures basically from spring bounce onwards. But if we zone in on the actual numbers you know you're looking at 4% you know in Manchester and Nottingham, Leeds, Liverpool, Edinburgh, Leicester, Birmingham you know so you're getting good growth in those areas.

Which is great news you know for those areas they're good vibrant markets you know now a lot of these places have had money spent. The problem I have with the rest of the UK is if you step outside those areas those main cities then there's not a lot of money getting spent in those areas and things aren't happening as much.

So why house prices going up you know this is the Zoopla I thought this is a good graph just to see so new supply is down 12% obviously if supply drops and demand increases which obviously demand up 34% you're going to get house rise if you get supply up and demand down you're going to get a drop. So right now demand is a lot higher add to that agreed sales, add to that total inventory is dropped you know so all these sort of things mean that house prices have gone up. 

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You know demand has outpaced supply and that's simple economics. And I think when we look at that what you see is you know that's what you end up with. I think house price wise you know that's positive but it's short-lived. I don't think in this circumstance we're going to see huge growth continuing.

I just don't see the fundamentals out there there's too much downside risk you know as I said before you know normally it's that's the upside that's the downside that's where we are in the middle and what I'm saying is actually the downside now is sort of spread out a bit okay. So we've got to factor that in and when we factor that in you know that is not going to sustain us even with the stamp duty and even that I mean it might get us through winter and now there's a lot of activity in that sort of market that under 500 market which is great you know so yeah but I think it will slow down.

Video Transcription

Let's have a look at some house prices and hotspots I think you know house prices for me right now is that there's been there's always a spring bounce and that spring bounce was extended because the stamp duty which is great because normally August is slow August was quite good but now we are going to see house prices start to ease off. And the demands start to ease off because we're heading into winter. We're also potentially into heading into another lockdown which is a whole other story but that's certainly not something we want but hey you know we'll see how we go there. Look, I think one of the interesting things I have this map. Now you can't probably can't read that map, don't worry about it. You don't need to read it exactly but effectively everywhere is going up and it has been going up okay and these are figures basically from spring bounce onwards. But if we zone in on the actual numbers you know you're looking at 4% you know in Manchester and Nottingham, Leeds, Liverpool, Edinburgh, Leicester, Birmingham you know so you're getting good growth in those areas. Which is great news you know for those areas they're good vibrant markets you know now a lot of these places have had money spent. The problem I have with the rest of the UK is if you step outside those areas those main cities then there's not a lot of money getting spent in those areas and things aren't happening as much. So why house prices going up you know this is the Zoopla I thought this is a good graph just to see so new supply is down 12% obviously if supply drops and demand increases which obviously demand up 34% you're going to get house rise if you get supply up and demand down you're going to get a drop. So right now demand is a lot higher add to that agreed sales, add to that total inventory is dropped you know so all these sort of things mean that house prices have gone up. You know demand has outpaced supply and that's simple economics. And I think when we look at that what you see is you know that's what you end up with. I think house price wise you know that's positive but it's short-lived. I don't think in this circumstance we're going to see huge growth continuing. I just don't see the fundamentals out there there's too much downside risk you know as I said before you know normally it's that's the upside that's the downside that's where we are in the middle and what I'm saying is actually the downside now is sort of spread out a bit okay. So we've got to factor that in and when we factor that in you know that is not going to sustain us even with the stamp duty and even that I mean it might get us through winter and now there's a lot of activity in that sort of market that under 500 market which is great you know so yeah but I think it will slow down.


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