Property Crash UK: Why I was WRONG!

The latest Rightmove data is out…

And it confirms the uptrend. But was I wrong about a trend reversal in the UK property market…

Or something else?

Let’s look at the data and discuss.
_______________________________________________________
Ready to be coached by me? Join the Property Unicorn Club here and get a library of free trainings, monthly live masterclasses and coaching sessions, plus quarterly in person events:

https://www.propertyunicorns.com/property-unicorn-club/

Looking to get started in Property?

Download my White Paper on how to invest in the current property market here:

http://robstewartglobal.com/white-paper/

Want The Best Prop-Tech To Help You Explode Your Property Business?

Get Your 2 Week Free Trial Of Property Filter – The Market Leading Property Soucing Tool here:

https://register.property-filter.co.uk/rob

Get Your 2 Week Free Trial Of Property Data – The Market Leading Property Analytics Tool here:

https://propertydata.co.uk/a/rs

Register for the Property Cashflow Secrets Masterclass here:

http://robstewartglobal.com/property-cashflow-secrets/

Looking for a strategy that’s tailored to you for the next 12 months and beyond?

Apply for a Strategy Call with me now and we’ll see if we’re a good fit to work together:

https://robstewartglobal.com/strategy

Okay so I am going to go through a few things in this ad hoc live uh live stream on YouTube the first thing I want to go through is to talk about where I think we are in the property Market where we are now where we’re going to be

In the next three six and 12 months then we’re going to have a look at what’s going on in the latest HPI which is the right move uh HPI which has just come out and then I want to talk about why the house price indices are actually completely irrelevant in the first place

In terms of if anybody is looking at investing professionally or you know being a property professional buying selling to make profit how it’s completely irrelevant and I want to give a few sort of pointers of um how to do it properly because there is so much

Debate out there whenever I I I go live and we talk about the HPI there’s always the comments about you know the HPI are you know they’re all made up or certainly when they’re going up when they’re showing price increases people say they’re not worth the paper they’re

Written on however when they’re coming down people go here we go here’s the crash that we’ve been waiting for talk about why it doesn’t matter um and then at the end we’ll spend a little bit of time talking about how to look at a set of accounts especially the balance sheet

And trying to understand what you’re looking at uh when you are oh oh thumbs down already uh when you are um assessing other people’s companies uh because there’s been a few comments um about that on um oh sorry it looks like that was the incorrect press of the

Thumbs down button so the first thing I’m going to do is give you my overall macro picture of where we are in the UK property Market the reason I want to start with that and I’ve actually I’ve got my phone here so I’ve written everything out I want to just talk

Through the bullet points of where I believe we are the reason I want to do that is as humans we have we have a few mental tricks that our brain plays on us or sort of coping tactic strategies if you like one of them is called cognitive

Shortcuts so to explain that what we do is we see a headline or we see a thumbnail or we see a title of something and our brain latches onto it rather than delve in and kind of you know look under the hood look at the substance whats to be discussed we make immediate

Snap decisions based on one very small piece of information it’s called a cognitive shortcut because there’s so much information that is bombarded to us on a day-to-day basis we don’t have time to process it all we don’t have time to look through all the data so we come to conclusions and internalize decisions

Based on these very small Snippets information now one of the issues with YouTube is that the algorithm promotes people viewing people people clicking onto uh onto a video the more clicks the more likes the more you know comments and engagement the more YouTube is going to spread it so therefore and I will

Admit this and I don’t like having to do this we have to have titles or thumbnails that attract people in to kind of earn the right to get eyes on you know the content that we’re talking about so very often you know we do have sort of um as as you know YouTube

Creators I would say slightly click baity headlines and the issue with that is sometimes it doesn’t convey the full extent of the content we’re going to be talking about so for example last time I put a um a video out the title was uh confirmation of you know UK property

Market price trend and of course lots of people go it’s not confirmed you know the hpis are a load of rubbish we’re still going down and if anybody actually watched that video I didn’t say we’re going up and we’re going to the races um I actually said that I think we’re going

To be going down over the next few months for the reasons I’m about to talk through with you so what I’m going to do is rather than go through all the data now I’m just going to give you my rview macro picture so we can have a talk

About it so here we go here’s here’s my view of where we are in the property market right now and I’ll tell you why the click baity headline I put on today while I was wrong I want to draw your attention to the one bit of this I think

I was wrong at and have the ability to confess to that so first of all I deal with probabilities of possibilities never absolutes I never want to put uh figures on I never want to say we’re going to go down this much we’re going to go up this

Much you know this is how many people are going to get repossessed anybody who’s giving absolutes right is just guessing and if they put enough guesses out there then they can say look I predicted it correctly anybody watches any of my own VI old videos you’ll see I talk about probabilities of

Possibilities and effectively what we have is we have a Quantum of possibilities that could happen a spectrum if you like of different outcomes and I’ve talked about the three main categories of those outcomes one is property Market takes off again one is we go into a longer shallower correction

And the other is we go into full Market meltdown I’ve gone into a lot of detail about what I think would trigger a full Market meltdown and I do not believe we’ve achieved it yet and we haven’t seen a full Market meltdown I’ve said for the last year that I I think we’ll

Be in a longer but shallower nominal price correction in the UK housing market but um we will see a deeper and even longer dip in the realtime housing market which is inflation adjusted house prices and so far we are seeing at 100% that narrative player out I also said uh

And about nine months ago I said for the first time I felt we were trough at the end of 2024 okay I thought we would trough at the end of 24 because inflation coming down cost of living coming down um utilities coming down and the tight labor market that is not suddenly going

To you know sort of implode or have a you know a big influx of Labor so that was always going to going to prop it up now we are not going to know if that’s the case or not until the on figures come out which is the actual data even

Though is selective and because that’s six to nine months in lag we probably won’t know until mid to end of 2025 exactly when we are troughing if we do trough at the end of 24 now it’s possible we’ve troughed already by the way that’s what I’ve been saying and I

Believe we’re troughing at the end of 24 now I also said um that the swap rates uh that we’ve seen falling in fact sorry let me just bring out average if I just bring up here um the so I can demonstrate this to you and I’ll I’ll flick over I should

Have had this prep beforehand if we look at Swap rates over the last year and this isn’t swap rates this is this is average mortgage rates um when we peaked and then uh we saw you know a lot of people thought we might go higher

Um in the summer of last year we thought Bank of England base rate might go up to 6% we then see the swap rates come down and I’ve been saying since November end of November beginning of December 23 that because we’ve seen those swap rates come down because mortgage rates have

Come down that actually increases people’s affordability in terms of what they can afford to borrow to buy property so logic dictates that will’ll probably see a pump or a boost or a rise in house prices in q1 2024 again I believe that’s exactly what we’ve seen and right now we’re seeing

All the indices Nationwide Halifax right move everything is showing a reversal in Trend and house price is going up whatever we believe about the indices if we believe them or not right so I believe that is because of the swap rates coming um coming down now what we’re seeing is because inflation is

More sticky which we always said it was going to stick in q1 24 when you look at the data and the rolling 12 months right we’ve now seen mortgage rates stick and start to rise again so that will again logic will dictate with everything else being equal that over the next quarter

To a half we would probably continue to see or we will see a reversal or continuation into negative territory but I believe it’ll only be shallow negative territory okay so I think for the next 3 6 n months we probably will see further nominal house price Falls doesn’t mean

It’s going to happen logic would dictate that it would happen Okay so I this is where I think I got it wrong now I fully admit that as of now I would have expected higher nominal price drops Peak to where we are right now than we have

Seen actually when you look at the nominal price drops they’re not awfully you know lower than they were the peak of 22 um the reason that that’s happened is because in has been higher and stuck higher for longer than I expected wage growth has gone higher um people have

Been pushing out the mortgages to increase affordability in terms of taking 30 35 40y year mortgages and actually even though nominal haven’t dropped that much we’ve seen a massive change in real so uh again if we just have a look at the real house price index okay so this is

Inflation adjusted by the Nationwide right as far as I’m concerned that is a significant drop in terms of inflation adjusted house prices so we have seen a considerable crash in inflation adjusted house prices but we’ve not seen it so much in the um uh in the nominal and the

Main reason for that is the very strong labor growth now we’ve we’ve had the right move HPI out recently I’m just going to go through this affordability part here and this kind of paints a picture for you now this is um this green line here is the average monthly

Amount spent on a firsttime buy home with a 10% mortgage you you can see quite clearly we had a spike up okay came down again and we had a second Spike up and that’s come down again so that means it’s become more affordable but this graph actually um is is more

Interesting and paints the picture so sorry if I start by zooming out um the teal line in the middle here is the average asking price in Brackets first time buyer the dark line at the bottom is four and a half times salary uh so what somebody can afford with four and a

Half times salary with one person and the yellow line at the top is four and half salary for two people so effectively what we are seeing here right is we are seeing a definite drop off in the average firsttime buyer um asking price for a house whereas we’re

Seeing a continuation in uptrend of the purchasing power of somebody and that’s based on the strong nominal wage growth so you can see and I I don’t have I can’t pen it I’m afraid but if we just look at the gap between let’s just say single um uh single salary which is at

The bottom versus average first- time buyer house price with the you can see that Gap closing which means people can afford more with the nominal um you know in relation to house prices with their strong wage growth okay if we have a look at the Halifax uh Halifax no

Sorry I wanted to look at the Nationwide this paints an even better picture right one of the key factors for me about house prices is the house price to earnings ratio now again when we look at where we’ve gone in 22 we were spiking up we’ve come down considerably since

Then so the effect of the high inflation the in effect of strong wage growth across the board the lack of mass unemployment we’ll get back and talk about unemployment in a in a bit and the stagnation of nominal house prices not the slight drop of nominal house prices

Actually done the effect of correcting house prices in terms of a ratio of earnings significantly so we have seen a significant correction in house price to earnings ratio it’s there in black and white unless you think it’s a load of rubbish okay so we’re seeing in multiple

Places um this difference and again it all feeds through to right if we look at inflation adjusted real house prices this is the real value of a house a significant drop so we have seen a significant drop in house prices okay so that’s another thing that that that I’ve

Said so um something I’ve also banged a drum about is that we have a lot of fragility in the system there’s so many competing factors when you look at house prices you can’t just say they’re depending on interest rates or supply and demand or people’s purchasing right there’s probably a thousand factors that

Go into the mix that pull these things in every single Direction um and they’re all competing against each other and nobody really knows what’s going on in terms of where you know where the trajectory is going to be in terms of the very sort of small granularity with

This and the models the hpis are models they’ve not been functioning with the lack of liquidity and the amount of transactions and so they are flawed they are skewed but we can still look at them to get an idea of where the trends are okay and I believe that right now we are

In an uptrend caused by the lag effect of the S rates coming down in half one 2023 I believe very strongly that with swap rates coming coming up again and the mortgages coming up again we’ll probably see a you know a ceiling on that and you know the house normal house

Prices come down again this could all change with various factors and I’ve said repeatedly that I believe there is an asymmetric risk to the downside in the property Market due to the fr agility of where we are right now it’s just about holding on but let’s say we have a third

Party um external event a black SW event that comes in that could easily turn it into a full Market meltdown and I think that’s what’s needed to have a full Market meltdown right now when you look at the last house price Corrections 2008 right was caused by systemic failure of

The banking system that caused the entire you know just the credit crunch mortgages were pulled lending stopped the market the market tanked before that when you look at at the correction of the late ‘ 80s into the early 90s it was significant recession and mass unemployment right we’re in a completely

Different world to 899 91 in terms of how how we are structured but we’re not in the we’re not the same as then we are not seeing 10 11 12% unemployment it’s very difficult to understand where the unemployment actually sits because of zero hours contracts because of um what

Is class an employed person or a self-employed person versus somebody who is you know long-term out of work versus somebody who’s unemployed um it’s difficult to tell because there’s not a lot of people responding to the surveys which actually give the on the data in the first place they’re using

Experimental data and the on and the bank of England fully admit that they they are running blind with this but all the models they are using say we’re pretty much almost at no no unemployment still so even though we are seeing an increase in company liquidations which I

Admit even though we are seeing business failures we always see business failures we of course we’re going to see a tick up in business failures and liquidations we’ve gone from 0.1% interest uh rates you know Central interest rates to 5.25% that’s going to put a lot of strain on a lot of

Businesses but that doesn’t mean that we’re on a cataclysmic recession meltdown with 10 11 12% genuine unemployment out there I’m just not seeing it right now and if somebody wants to show me otherwise you know in with empirical data and evidence I’m I’m happy to take a spear on that and have a

Look at it but I’m just not seeing it my scaffolding business right we had a quiet Q4 we had a bit of we had a slow start to January but we are flying right now the house builders are all coming back and breaking ground right we’ve just taken on two significantly large

New build sites timberframe new build sites I’ve had to go and get a finance facility to buy a whole load more kit to service these sites and my anticipation will be that the house builders are thinking if we break ground now we’re going to be selling in Q2 Q3 uh 2025 you

Know at which point we’ve probably had a reduction interest rates the Market’s probably at least bottomed and people are coming back that’s an that’s anecdotal okay so I do still believe though there is asymmetric risk to the downside more risk to the downside than the upside um however as I said we’re

Not there not there yet so I’ve talked about that um the final thing was well I’ve said it already that the hpis are models I can see a lot of um uh a lot of comments coming in by the way team I will come back to those comments after I

Go through the exercise I’m about to do and sort of go through them all with you because I’m always Keen to talk about um what you’re seeing on the shop floor what you’re seeing in your markets but I want to um talk about how to look at this professionally rather than just

Taking a look at uh the house price indices and if we go to um let’s go let’s go to to to right move okay so that’s a rubbish rubbish things there’s no real figures on there is there we have seen a quite a large so it’s 1 and

A half% there we go 1 and a half% rise in asking price don’t forget this is asking price listing price right move is traditionally unreliable with this it could be lots of bigger properties coming to the market but it could just be that people are having a load more

Confidence right and getting back into it we always then talk about look these hpis on a national level are a load of rubbish we need to look at a regional level and I agree with this so if you look at the regions right actually in terms of asking price Scotland green

Northeast green Yorks H Green East Midlands green Northwest Green West Midlands Green East of England is a minus 2% year- onye London green Wales green Southwest and the southeast are negative year and year so we’ve seen the biggest adjustments in in the South London Southeast Southwest I get it there are Regional

Variations uh if we look at Halifax um did that the regional variations I don’t think this did have the regional variations in it um but when we looked when we look in detail in the Halifax it does talk about Regional variations again you look at the South um

Completely different in terms of year on-ear to uh you know UK as a whole or Scotland Northern Ireland which which is which is skewing things that said right um these figures or these graphs look weird that as a recovery is weird there’s no bottoming pattern I would

Expect a bottoming pattern so I fully anticipate these models are being skewed with what we’re seeing right now same with right move when we look at the price and activity Trends if we go to the similar uh similar thing with asking price trends there’s no bottoming

Pattern uh we’re seeing a bit of a v recovery and I would expect usually see some form of bottoming pattern so I I’m not sitting here and saying that these hpis are are completely accurate I think we’re still massive lack of liquidity out there which is skewing the figures

But the trend right now when you look at the data is that there are more properties coming to the market there are more sellers coming into the market searching value and because we’re seeing the market unfreezing or thoring if you like I suspect we will see more people hit

The market with a perception of hey look you know interest rat is coming down Now’s the Time to start listing that influx of property will likely see more downward pressure on house prices an influx of properties more activity does not mean that activities are going to go up I foresee

A further down um pressure on prices by more Supply or Supply outstripping demand and actually when we look at um did I get it on sorry I had it set up but it’s not there now if I go Rick’s residential there we go if we go to the Rick’s residential survey

If my internet will play ball I’m to download it now AR sorry so this is the latest Rick’s residential survey um and it’s interesting to see again the trends and I just want to go to sales uh sales Market CH that’s National prices not so Keen about that here we go so National

Inquiries right we’re now seeing a positive uh on the national inquiries new vendor instructions we have SE we are seeing right if you go here this line that you’re seeing in the middle is quite a significant optic in terms of new listings right which means more

Supply coming onto the market now if we look at that versus uh where’s they that was listings new vendor instructions there was National okay here’s National inquiries so here’s the inquiries I this is the buyer side you can see we’re in the positive but it’s not nearly as much

As the listings right so that to me shows we are now for the first time in a while seeing a an increase in supply of stock versus buyer demand um and again logic dictates that will see a continuation um of um nominal house price drops as there’s more stock less

Buyers buyers can be more choosy buyers can go for the good deals right and negotiate the good deals because there’s more stock out there so that’s something that’s interesting to talk about but I want to talk about now why I think the whole sort of looking at this big

Picture and even right when you go to the Ricks uh it’s it’s all broken down by region why if you’re doing this professionally none of this matters it’s completely irrelevant okay um because the prop the UK property Market is an interesting Beast it’s not a national Market it’s not even a regional

Market it’s a market that is almost almost fragmented on a street by- street basis so if you are professional property person invest developer right this is how the grown-ups do property you’re not going to be looking at any of those charts I’ve just gone and use that

As your buying decision um I want to give you a few sort of uh a few sort of insights as to how specific this is when you’re doing it for a living right so if we come over here and this is um this is primelocation.com this is a heat map of

Property values obviously the the hotter an area is the more expensive the location I’m going to zoom in on my local investing area so I invest in Chester and the surrounding areas so if I come over here right and I zoom in here you can see this is one town in one

Area of the UK and you can see completely different colors all over here so we’ve got an area over here which is blue this is a lower value area we’ve got another area down here blue lower value area we’ve then got an area here that’s yellows and reds okay and

Again we’ve got areas here that are yellows and red surrounded by Blues so if we zoom in even more right let’s go let’s go down here right the Dynamics of the property Market will be completely different on these streets compared to these streets and this is literally a five minute walk

From each other so you have to I I call this when I teach this to my clients by the way I call this microscoping this is not something I usually talk about on the YouTube channel this is you know very granular way of looking at property

It’s it’s it’s very difficult to kind of dive in and have a look at this sort of stuff because of course when I focus on specific area 99.99 % of people who are watching this like well that’s not my area so I don’t particularly care about

What’s going on between Ken Park and and Le and Chester whereas we can look at the Trends on a on a on a macro level when we’re talking through that data so um the point is we need to understand the areas on a street by Street basis and when we’re looking to buy

Property and assess what’s going on with property we don’t care about listing price we don’t care about discounts on listing price I’ve had a lot of comments on videos people saying oh look you know you need to do your research better because just open up right just open up

Land registry and you can see properties with a 20 30 40% discount based on what okay this is always my question that comes back a discount based on what on listing price because listing prices are relevant right as a professional we only care about sold comparables and when

We’re actually going even into even more detail about it what we really care is about sold price per square foot of a property in terms of sold values so we’re breaking down properties on a square basis what’s that worth what’s it been selling for and then what can we

Buy are we going to be buying it more than that or we’re going to be buying it less than that and that shows the direction of trend of a local property market and that’s the only thing that we really care about um another thing to caveat here is yes for sure right I’m

Sure there are people who are selling their properties 20 30 40% below market value or not market value below listing value but I’m also sure there are people who are selling it that much below market value because there will always be four sellers out there in a ragingly hot Market you still find

For sellers that for whatever reason have to sell their properties below market value to get a quick sale in a dropping Market you’ll still find people who probably managed to sell their properties over the market value because of various reasons so again we have to disassociate the fact that number one

People are buying below listing price and number two people can buy below market value in in any uh market and understand what’s going on in the local market so here’s a couple of tools that I use one is um this is called property data so if I come over in fact let’s

Just start from the beginning right if I go into uh here and I put Chester in it might just say let’s go Chester City Center let’s have a search reset it to a circle and put a let’s put a 4 mile radius around it okay so if I wanted to

Analyze what’s going on in my uh local area I would first of all geound the area I’m looking at I would have a look at the data that’s actually happening now this is real as accurate data as you can and we have both asking prices and sold prices now I don’t particularly

Care about asking prices they’re irrelevant I want to understand what’s going on the local area with sold prices okay and using a tool like this property data by the way if anybody wants to have a play with this there’s a link to get a free trial in my bio we can break down

In that specific area what prices are averages and then sort of um 80th percentile 20th percentile ranges dis um we we get rid of the outliers to have a look at what things actually selling for okay see the cluster see the spread and if we’re doing it really properly we’re

Going to want to break it down by a pound per square foot right so I know in Chester and you know I know this like the back of my hand an average price per square foot has been between 270 and 300 for the last few years so before Co is

Probably 270 now it’s probably about 300 pound per square fur in terms of in terms of average um and uh this is showing us at the moment that uh sold data is 285 pound per square foot so when when we’re now assessing our properties we want to assess it by this

Pound per square foot break it down and compare apples with apples so how do we do that right here’s another tool that I use this is called property filter if I go back into uh if I go into this effectively what this does is it picks up properties that are have motivation

To sell based on various trigger points I’ve got various lead generators in here again if you want to play around with this there’s a link in my bio that you get a twoe free trial and a discount on the first month but if effectively we’re looking at motivated properties and

Let’s say uh let’s say I want to have a look at this particular property here I can have a look at the price I can see this last sold for long time ago 96 for 87 or 88,000 I can see it’s had a price

Drop from 375 to 365 I can say it’s been on the market been off the market been on the market again but what I really care about is not the listing price which is 365 okay I want to understand what’s going on in the neighborhood so

Again we’ve got lots of Market data we can see what the a AES are in terms of the sale we can see what the averages are in terms of rent if I have a look at the comparables and again this is really uh sort of important stuff to be able to

Do um it’s going to show me in the local area the other properties of similar size and we can we can filter this based on bedrooms based on you know square footage based on detached semi detached so we’re comparing apples with apples I

Go to last sold and if I go down here it gives me a list of all the last sold comparables broken down to a price per square meter broken down to an EPC so I can immediately see what what things are selling for and then understand if I’m

Buying stuff for for lower or more expensive than that okay so let’s just say the average so it gives me here an average price per um surface area of 358 uh pounds per meter squared so I can now assess if I’m looking to buy anything thing that’s the

Average of course we might want to delve down even deeper to go right what’s the average on this street or that street or you know for this type of property be it a flat something like that and this is the granularity that we need to go into

To truly understand what’s going on in a local area right our pric is going up our price is going down and if we’re starting to see a trend let’s just go back to property data over here right if we’re starting to see a trend because we

Can filter this by um you know we’ve got we can go the last six months in fact let’s just have a look let’s let’s do this right so the last six months um the average price is 284 the last 12 months it’s 285 so it’s pretty much stagnant

Right when you look at it let’s go the last two years 283 let’s go the last five years this going to now bring us data pre-co as well right you can see it’s you can see it’s lower 262 so you can see it’s pretty much stagnated for the last couple of years

In the local area in terms of prices price per square foot of sold now yes I know you’re going to be saying there’s a lag in the data there is a lag in the data but we can only go so far um you know with this exercise but we can and

You know we can have a look at the growth because this is going to interpolate all of this and give us our fiveyear price growth to understand in that local area in that Geo bounded thing um area that I’ve asked you know I’ve sort of um gone for we can see what

The trends are happening in terms of that local area Dynamic so I can see right now you know we are on a downtrend in Chester um it’s going to tell us uh you know we got so much data here that we can play with my point is Right hpis

Are irrelevant if you’re doing this professionally we need to understand and look at the data on a micro level a microscape level to understand what’s going on in our local area and if we’re buying things below the market value or above the market value and where the

Trend is going so I hope I hope that’s a little um uh that’s a little insight um as to you know kind of if you’re doing it properly if you’re doing it as a professional all these hpis are totally irrelevant right uh you need to understand what’s going on by

The way that was just a little insight as to the residential Market when you’re looking at things on Commercial valuation basis is completely different again I’ll give you an example um I just uh one of the reasons I’ve been live that much recently is is i’ I honestly

The since coming back from Christmas I’ve never been busier in my property business I started this channel last year I was actually pretty quiet last year kind of twiddling my thumbs a little bit um there was not a lot going on I wasn’t buying I bought one property

Um last year but wasn’t particularly active because we were in that sit on your hand sort of um you know regime we were seeing n nominal price drops bigger real-time price drops interest rates could have gone through the roof it was you know I’m not going to be buying huge

Amounts unless they’re really good deals with potentially interest rates going up to 6% um but we’ve come away from that now we kind of come over the peak of that the forward-looking projection is that interest rates are coming down will come down in a gradual um process and

That gradual process uh will be dictated on inflation inflation and most crucially wage growth which is why think they’re not going to come down as quickly as people are hoping they’ll come down the only caveat to that is if the econ the economy does go into meltdown we’ll probably see interest

Rates plummet to to save the economy but we’re not there and that’s why the bank don’t need to ratchet them down quickly now they will have to because the the longer they stay up here the more strain it’s going to put on the economy right

And they don’t need to grind it over a long period into the ground but they also need to be careful about um you know just releasing the shackles because if they do suddenly D interest rates down I can feel there’s a lot of pent up money just sitting there ready to pour

Back in which of course we’ll see everything go back up again in terms of inflation so look I I’ve kind of rabbited on quite a lot um on that I uh I I apologize for that I feel like it was almost a little bit of a little bit

Of a rant um in terms of uh sorry I’ve had some I had some I had some comments and I I think one of the great things about you know being out in the public space or not one of the great things I think I think one of the things about

Being in the public space and you know creating a narrative is you have to expect people to challenge you on what you’re doing and I embrace people challenging me on what I’m saying what I’m talking about um but I hope you don’t mind that when people do come and

Challenge uh me that I come back with actual granular explanations of why I think the way I do um because I’m not I do not class myself as a YouTuber I’m a property professional we’ve got three Deals going through that I’ve um offers on in the last four weeks okay

That’s three three property transactions going through very busy time at the moment which why I’ve been kind of busy um and and not spending lots of time on on YouTube doing the job right and I I do know that somebody um was it John step sorry Stephen um Stephen hello uh I

Know you asked about Company accounts and obviously you know uh question the credentials to be able to sit here on YouTube and talk about this sort of stuff as a expert whatever an expert is um if anybody ever wants to just go open source and go into company’s house right

You can see Company accounts on on company’s house just put my name in it’s Rob Stewart Robert Stewart right and you can find my companies as long as you find me there’s probably other Robert Stewarts out there I’m not afraid of this the thing that I would caveat and

Caution because I saw a lot of people talking about um Charlie and by the way I just want to say somebody um called me out and said I’m obsessed with Charlie because I was talking about the minus 35% or minus 37% um prediction um I just

Want to say right now that in all the other YouTube sphere Charlie’s the person I would respect the most and would most like to go out with a drink for I don’t actually know Charlie I’ve never met him I’d be delighted to meet him um I agree with everything he says

Other than the extreme of the you know the um the price wings I know you know he talks about it being an average not over a year but over the whole pig to trough which could be five years for example and I don’t disagree with that I

I disagree with the normal amount I can’t see from here with the balance of proper abilities us being anywhere near 30 35% Peak to trough um you know on on average but the world has changed over the last 18 months so you know there’s no criticism but anyway my my point is I

Saw people talking about Charlie’s accounts um the problem when you go on company’s house and find uh filed accounts is they are abbreviated accounts which show a snapshot of a balance sheet in the period of time and a snapshot of a balance sheet in a period of time is a

Complet notorious unreliable way of assessing a company right when you own limited companies you will you’ll run lots of cost there’s lots of accountancy practices that that go through um you know submitting accounts for example you know deferred tax liabilities um you know acrs um you know creditors which

Are your own loans you know director’s loans your own companies loaning stuff for actually creditors redu stuff on the balance sheet uh Capital allowances something with teach you know you can you can buy a property and get hundreds of thousands of pounds worth of capital allowances which then sit as a

Effectively a credit on your balance sheet um so reduces what looks like net assets depreciation amotization so many things that completely skew what is a balance sheet which is a snapshot of what the company owns doesn’t show anything to do with company performance doesn’t show anything to do with

Turnover profit margins cash flow it’s just a snapshot of a balance sheet right so if anybody ever wants to you know go to have a look at this sort of stuff just Google or just go onto the company’s house um where website stick in my name right uh I’ll I’ll bring this

Up so you can see it stick in stick in my name go and have a look at any of the the companies I have right if there’s any any doubters as I said I’m not a YouTuber I’m a property person um and and have a look but understand what

You’re looking at so for example if uh let’s find my main Holdings well one of my Holdings companies uh where’s it gone can’t even can’t even find it anymore let’s actually put the uh put the company in there instead and look I’m not afraid to do

This Live on YouTube there we go so if you ever want to go and have a look at these things right go go into the company go into the filing history you will find um the sort of small micro accounts which you can just have a look

At right but just understand what you’re actually looking at so this is this is one of my one of my companies this is um one of my properties holding companies so let’s just zoom out on that one so you can see you know have have a

Look at it see what you think is in there um you need to understand things like what are these creditors okay who are the debtors um you know what what is this you know what is this creditor here that’s over you know over a year which

Is you know which is a bank loan how how are these values actually derived at okay so this is giving a a net shareholders funds in this one company right you can delve into it a little bit more deeply but this doesn’t give any indication at all of turnover of profit

Um you know of cash flow uh this this company could be doing 10 million pound a year turnover it’s not but it could be and it could be you know taking out 10 million or to give you another example uh let’s just go for again if you go to

A company you can find the officers you can then find me and find all my other companies you know if I show you another one of my property holding companies this one here just to show you through it again um you can see this particular one has got a much

Higher net sorry gross asset value in in terms of the the the properties it holds um but you can see there’s a there’s a large amount of creditors falling due uh within one year now those figures right are my loan like director’s loan into the business and Loans from other ones

Of my companies into the business um so you might look at that and go oh there’s not as many shareholder funds down there at the bottom well it’s because there’s a negative um you know credit against this for my own money that’s been lent into the business so it really it really

Is important to understand things when you look at balance sheets you know just to tie this one off another one you could look at is let’s just go back here if we go to my um scaffolding business so let’s go to this one here uh let’s go to the accounts on this

One and by the way the accounts are generally a year to a year and a half hour date anyway because that’s just how it works um you can see this one is not showing an awful lot of tangible assets right this company owns hundreds of thousands of pounds worth scaffold

Equipment but it’s all been depreciated off the balance sheet so this what I mean about looking at looking at accounts that are on company’s house and coming to conclusions about what businesses actually do but feel free to have a look um if it’s of interest um

And you know if you sort of you know want to check credibility I think it’s important for anybody who puts them out in the public space like YouTube to be open book about it and feel free to check the you know the credibility and if you think comforable BS fine let’s

Have a chat about it cool that is what I have uh for you today team so uh let’s have a quick look um at any questions as we go through I can see there’s quite a lot of comments so I’m not going to go through every comment I’m going to pick

Out some questions or statements to see if it um you know challenges what I talked about or backed up what I talked about uh so let’s put this so Mark oh why is that gone really small on the screen I wonder if I can make that bigger give me a second

Mar oh there we go it’s gone text box shrink let’s go no don’t want to do that somebody’s been fiddling with my settings nope sorry I just have to read it my bad uh how do I make oh my gosh it’s all sorry it’s all gone it’s all gone wrong

There we go let me just make it a little bit bigger like that is that that’s that’s that’s going to work isn’t it that’s going to work let me drag it around uh so Mark says the amount of properties in your area South Yorkshire booming on right move can tell the

Government’s advice work for a while evictions coming soon defaults the forbearance rules coming to an end yep it’s it’s it’s a great Point um the forbearance has definitely been part of the Melting Pot that’s propped things up um it’ll be interesting to see when forbearance comes to an end what does

Happen um and if anybody doesn’t know forbearance is the the 12-month grace period if you like that banks have you know agreed in the charter with the government not to start the eviction process when people come to areas uh when we look at the areas and

Possessions data we can see R have gone up possessions have come down because of forbearance um there’s been no doubt that arar have gone up we would expect it with the interest rates doing what they’re doing it’s we’ve seen it much more in the buy toet Market by the way

Than the residential market so that’ll be interesting to see and I agree Mark that’ll be interesting to see the point is I think you said booming on right move um is kind of going to what I’m saying that it’s a perception thing that people have a perception of being able

To afford more because mortgage rates come down therefore for the same monthly payment you can actually get more of a loan um and you know you look at mass media everybody’s talking about property Market turning turning a curve you know uh turning curve turning a corner you

Look at the hpis it is without a doubt if you’re uneducated you look at it all and go wait a minute property prices are on the rise again let’s let’s let’s Pile in um which I said would probably happen I talked about perception how perception moves the masses I know a couple people

Disagree with me like perceptions are relevant if you can’t afford stuff well the point is you can afford more because your income’s gone up right and mortgage rates have come down so you actually can afford more so the perception is there and people can afford more so they’re piling

In probably without the realization that I would suggest we we’re going to see further price slips not massive unless we see that Black Swan event but there will be further price slips this year uh Urban says house prices have not Fallen as far or fast due to inflation

And lack of transactions there been no Force sellers um and no one who can afford the US prices Urban I think we’re in total agreement with that appreciate appreciate your comments um and oh let’s just follow up with this one that Urban puts on um because I totally I totally agree with

This shocked to see that the real value of homes had not increased in 20 years we’re all poorer thanks uh to that money printing so I could not agree more with this I’m just going I just want to really stress this point actually um if

We come back over to to the iPad sorry I’m just going to take your comment off um this this graph which is real house prices right if you see where we are at the moment uh which is the end of Q4 2023 we’re obviously about to come to

The end of q1 2024 so we’ll see the next uh L tick on the graph next point on the graph um come out probably about a month or so you track that back to the left I wish I could draw on this but we’re pretty much

The same as we were I know you can’t see it but I’m trying to put it right in the middle and and and then drag it up so we can see the date about 200 too right if we if we draw that up um in terms of

Real house prices they are worth roughly the same now in terms of inflation just as they were in 2002 um which as as Urban quite rightly says is a big function of the money printing quantitative easing uh and the inflation and that is why by the way I

Do say to people um that your home and the wealth stored in your home should not be viewed as a store of wealth we we in we in the UK are fixated with property as a store of wealth I believe that is a really dangerous um thought

Process to have and when the gurus right get on and say invest into property because it doubles every 10 years actually that’s that’s um even though you can skew the statistics to make it look like that’s correct it’s actually yes if you average it for the last 70

Years it is correct but if you look at the last 30 years completely incorrect um by the way but the reason I I I always say property shouldn’t be seen as a store of wealth is in real terms right when you look at that and this doesn’t

Mean it won’t reverse doesn’t mean it won’t change at some point we could well see a big increase in real house prices just not in the next two years but in the next cycle we might see it right if you go back to this and look at in fact

That’s an interesting exercise right let’s look at real house prices from the peak in late 80s yeah which is the small Peak over you know just the left hand side um of the graph and then you see the it was a seven-year seven-year decline in real house prices to sort of

95 where it troughed in real house prices then 95 to 20067 saw a Monumental Monumental increase in real house price inflation um like huge if you see that that’s gone from what 130,000 to 340,000 in roughly a you know 101 year period massive increase since then we’ve not

Just stagnated we’ve we’ reduced right so we had the we had the crash the crash brought it down in 2008 and then really we’ve stagnated from there so when everybody says postco we had this massive boom when you look at inflation adjusted prices it’s kind of just a tiny

Little uptick actually we we haven’t that postco boom was nominal but not in real time house prices and we’ve now seen a fairly significant correction so from what’s that from sort of 200 and 9 10 to now we pretty much flatline on a macro level if not if not

Lower well we are lower doesn’t mean that you know we we won’t see if you look at that graph I I would say what we are seeing now is more akin to late 80s early 90s correction than 2008 which was systemic banking failure so you never know we could see a

Bottoming pattern for you know four five six years and then the next cycle could see a massive increase in real time in real house prices i’ would imagine we probably will see a big uptick in realterm house prices at some point over the next decade or you know cons

Resumption of it but the point is I’m talking about like five six years decades these are long Cycles um and in the meantime if you own a house and you pay you live in it and you pay to service um you know mortgage interest and maintenance and all of that sort of

Stuff and it’s actually eroding in value you could have put your money in other places which is why I view property as a cash flow mechanism not a store of wealth um cool let’s see what we got Mark uh so I can see question there mark but I can’t remember the context of

It uh let’s put this on interesting comment here um Bak sorry if I pronounced that wrong what if sunak Al replaced by Mund followed by another mini budget that spikes guilt yields black one yeah so that is the sort of thing that would be a Black Swan event

Um and this is what I mean about there being fragility in the system we just don’t know what’s around the corner I don’t think anybody predicted the mini budget in 20 in 2022 and how that would affect things so much right but it did massive

Um so uh yeah could be you know could still be Middle East um you know Tinder Box could be Russia Ukraine um you know it could be escalation of hotti rebels that that you know could be something that nobody’s the point of a black one is nobody sees it coming so actually I’d

Suggest everybody’s looking almost um people are almost searching to go D the blacks SW because there’s sorry you’re going to get me on one now um sorry team so weal I talked right at the beginning about the principle of cognitive shortcuts which we take when we you know

We don’t have the time to fully absorb all of the actual information so we go on a headline or a sound bite and internalize that and I use the word internalize very specifically because uh what we do is when we when we um see a narrative and we see it with

Our own eyes we internalize it and when we internalize a decision it’s very difficult to change our minds even when we see um contradictory data if it’s if that data is in Conflict to our internal decision our internal value set our internal Compass if you like we’ll go out and

Find selective data to disprove you know the the predominant Trend or theme or you know data that we’re looking at and without a doubt over the last 18 months that all the talks been about property market crash um with some fairly big figures talk you know talked about it’s not manifested yet but

There’s a lot of people who um have I I feel have internalized the fact it has to be crashing right it just interest rates are high economy is is is crap the market has to be in freeall and are internalizing that and therefore going out and seeking information to back up

That internalization if that makes sense very difficult to change your mind by the way when you’ve internalized something um very very difficult so I feel a lot of people are almost looking for that Black Swan event going to oh it’s going to be Middle East it’s going

To be you know um shipping it’s going to be Russia Ukraine it’s going to be whatever it is almost trying to find that that that event go that’s it this is the thing that’s going to take us over the edge the chances are it’s actually going to be something if if

There is a Black Swan event it’s something that nobody’s even looking at right we’re all looking over there at Middle East and it’s going to come from over there right we just we have no idea if it does happen and you know there is a theory that a black SW event

Happens roughly every decade or so um personally I I think Co was was was it you know that was a unprecedented um event and of course we then had you know all the all the market manipulation to to cushion that blow um but it was a Black Swan event completely different to

You know 2008 for example and then the one before that was probably 911 so um I mean saying that we’re four years on from the seword aren’t we so you never know um I don’t know uh reg green prices haven’t corrected from the artificial boost during Co well there we go yes you’re

Right so uh is yeah it’s interesting I think there’s that QE event was so significant there was so much money pumped into the system and actually a lot of that money that’s pumped into the system has ended up sitting with the rich the wealthy the sophisticated who know what to do with

It and I think a lot of it’s just sitting there ready to come back in um there we go car porn this guy says a lot about nothing well go and watch something else then why are you sitting here through hours worth of my live analysis if you’re not interested um

Brody the huge problem is that affordable home simply not being built uh correct uh in fact I saw I was reading something very interesting we are I’m going to tie up in a in a little bit um about house building how actually house building is not the issue um

There’s plenty of housing stock out there so I’m going to do a bit of analysis because I’ve always said that supply and demand is not the issue uh interest rates are a much bigger factor in house prices than Supply demand yes of course Supply demand does affect

Affects more on a local area area basis the the issue is so right now in the UK we have almost 700,000 empty units almost 700,000 empty properties in the UK saying empty nobody in them right um what we actually have is a supply and demand in balance for affordable homes

And a supply and demand in balance for people actually having you know the ability to rent stuff or or all of that sort of stuff or or or buy stuff so it’s not that there’s a lack of stock it’s a lack of availability people to buy it

But I’m going to do a bit more research on that and we can talk um we talk about that there we go um uh I’m trying to buy a house listed for 895 we offered 865 and the seller said no they have no other offers after multiple viewings it’s a five bed by

Primary score frustrating sellers 65 plus so the problem is um let me just put this on the problem is in this scenario is they’re not motivated they don’t need to sell at a discount and this is the issue this is what’s propping thing up is we we are not

Seeing the four sellers that that would tip the market into um uh you know into into meltdown if they’re if they’re elderly 65 plus they probably haven’t got a mortgage on it they’re probably just sitting on it you know the bills have come down again they’re not

Motivated why would they need to sell at a reduced rate if they if they don’t need to sell right they can probably wait weather it out for a couple of years and then try at a higher price so when I’m working with my clients with finding properties to buy at a discount

It’s all about vendor motivation and vendor circumstance um and you know we’ve got various mechanisms we can use to do that so again if I you know just to just to give you an example right when I use platforms like property data which I love by the way okay so if I

Come up here to the leads generator so we we can just basically create create lead generators based on um different factors different filters so if I’m looking at things to flip right and I go and check the leads it’s then going to list it or it’s going to list properties

You know you can see here properties that are back on the market and they’ve been reduced so there’s 60 in the area properties that back and been reduced if I let me sort this by um biggest most reduced here we go let’s filter by most reduced there are going

To be some anomalies in here um I’m I’m pretty sure this one here has been reduced by 30% right let’s have a look at it let’s show you the details so this property reduced by 30% we we we look for something called the ladder um of

Price history so you can see here we’ve got a ladder down in terms of the price this big red blob here means it was off the market probably means it was um sold subject to contract which then fell through so you can see it listed at half

A m um came down to 475 dropped to 450 probably went under offer for whatever reason um fell through which is kind of Summer last year and then it’s dropped a few times so that has a significant um significant motivation to fill motivation to sell now what we now need

To do is understand what is that motivation what are the circumstances and how can we then effectively leverage that to craft an offer um that the vendors you know would want to go with so you know fantastic um you know platform to use by the way if you want

To in fact it’s not that one it’s this one if you want to give that um give that a go right just use thats I think that’s the wrong that’s actually the wrong link um so maybe don’t use that I’ll put go go to um go to go to the uh

The description of this video you’ll find a link in it which gives you two weeks fre to have a play around with this tour okay uh Perfect all right team look look there’s there’s too many to go um to go through uh but thanks very much for all

The comments we’ll go live tomorrow because um what do we have we we’ve got something coming out tomorrow ons data is coming out is being released tomorrow for January so I’ll be interested to see what the on I suspect it will show a correction down on because it’s probably six to nine months

In in lag um but look um it’s great to see everybody great to have a chat sorry I went a bit ranty uh feel free by the way if you’re still here an hour in to and you haven’t subscribed yet guys we’re on we’re on the route to 4,000

4,000 St to 5,000 um please if you get benefit from this car porn clearly doesn’t so um apologies carporn um if you uh if you don’t want to continue watching plenty other channels you can go and watch that are full of absolute BS that um you know can be indulged with

But if you do find Value from this channel um the more you like the video subscribe to the channel the more YouTube gives reach uh you know my regulars know that I’m a mission to help empower people to make better decisions based on what’s actually going on rather

Than the BS that’s out there in the mainstream media please if you do watch this regularly and you haven’t yet please subscribe please help out get more reach to more people um I will see you soon cheers Dino um I will uh uh speak to you probably tomorrow or

Thursday to talk about the ons data have a good one to You