Property Crash UK: Have The Experts Got It Wrong?

Before we get this months CPI print…

Public sentiment has surely shifted to a more positive outlook.

But with the mainstream media bigging up house prices…

Are they actually still in free fall?

Let’s discuss.
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So without a doubt there is a renewed sense of optimism I would say in uh both the masses mainstream media about the property market and the economy as a whole in fact I was up in Chester just doing my my two- weekly pilgrimage up there for 5 days speaking to my Builder

Who said that he has never seen such a load of inquiries for new work coming in January it’s been his biggest January for many years and to me that an indication that people feel things are turning and maybe we’ve bottom doubt but what I want to talk about this video is

How the graph that I got up here actually maybe paints a different story um to where a lot of people think we are in the property Market I’m going to talk through this graph but I’m also going to look at the data that’s come out over

The last few days since I last went live to see where we are in many aspects before we go for the latest inflation figures that are out on Wednesday of course that’s going to create a lot of discussion points and really for me it’s going to dictate the trend have we

Actually seen inflation drop off properly with a confirmed Trend and if we have a third large drop off in a row that will be for me a confirmed Trend or is it two one-offs and then we’re going to go into stickiness so we’re going to Crunch the data we’re going to get into

That in a second but first of all I want to give you a quick message for those of you who are regulars you’ll know that I’m fascinated by data and when I look at the channel stats I can see that just under 65% of people who watch my videos

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People as possible on this planet to take ownership of their Futures using income producing assets to reclaim your time freedom and choice and if you can just hit that subscribe button I’ll work tirelessly to grow this channel make it better and better for you so we can fulfill that Vision together I cannot

Tell you how much it helps as the channel gets bigger I can put more resources behind it improve the production the content and ultimately the value that I give to you so if you could do me that small favor and hit that subscribe button now as well as the

Like button on this video it would mean so much to me as we continue to grow this community together it’s the only favor I I’ll ever ask you thank you and let’s get back to the episode okay so please do hit that subscribe button now and also hit the

Like button and find the comments button if you’re on the live and you’re following through on the live and if you’re on the replay feel free to follow through like you’re on the live ask your questions what I generally do is go through the figures and facts and then

Come and we can have a discussion afterwards and for those of you who are new to the channel on these live streams what I aim to do is cut through the mainstream uh media BS some of the headlines that are out there and try and look at what’s actually going on so I

Want to focus uh on this now this is the real or inflation adjusted house price index that’s published from Nationwide so effectively it’s a nationwide HPI and then adjust it for inflation now if we look at this graph there’s something that for me is fairly obvious um and

That is that the correction in real house prices has been extremely dramatic compared to the nominal house price Falls which are the ticket price of a house so a lot of people have been talking about where is the housing price uh the house crash gone um you know is

It going to happen we have seen it we’ve seen significant drop of real time value now I get it a lot of people say to me Rob don’t care about inflation adjusted house price a real house price because we buy and sell um houses in nominal

Terms and that’s correct I get it for the majority of people I talk about this in terms um or from the perspective of being an investor SL developer i.a property entrepreneur who makes money from property and therefore understanding the inherent value of that asset is important and right now I look

At this and property has gone down a lot in terms of real prices obviously we’ve seen inflation be High um and that is very important because right now I’m looking at that going that is cheap property is cheap in terms of uh inflation adjusted or real prices of

Course when you compare it to wages and the price of everything else it’s now become a lot cheaper and let’s just see how much cheaper so if we look at this and I crunched these numbers just before coming on um we’re actually 22% down from the very highest inflation adjusted

House price just to show you where that is that’s Q3 2007 so um let me just actually if I go on to drawing tool that’s here okay so that’s that’s the very Peak so we are 22% down to where we were there and if we look at

The current cycle okay so the current cycle peaked out in inflation adjusted house prices at q1 2022 with 15.7% down so again if we look from there to there that drop is 15.7% down in what’s that sort of a year and a half that’s quite a

Large drop in a year and a half okay so we have seen that price crash um so when everybody’s wondering you know why are the house price not crashing and I talked about last week I did sort of 10 to 11 points of why they haven’t crashed

In nominal terms but end of that by saying look in real terms we have seen a significant price adjustment in the property market and that’s important to understand if you are looking to effectively um make money from property as a professional as a property entrepreneur so that’s the first thing

Um that I wanted to talk about uh the next thing I want to talk about is we’ve seen the right move um uh HPI house price index come out today and of course the headlines are all about house prices are on the up again so let’s look at the

Actual data and let’s understand what’s happening with the right move HPI because sentiment I believe is such an important part of what’s going on here okay markets uh are shifted by sentiment and of course we’ve got two separate things we’ve got affordability and we’ve got sentiment everybody uh you

Know the Perma Bears the people are saying we’re going to be crashing this year still 20 30% are saying affordability is the constraining factor and that’s going to drag things down but sentiment and we talked about some of the reasons why nominal house prices haven’t crash and therefore what people

Can do to effectively stretch their affordability much more including um having more liquidity or borrowing more deposit from potentially Bank of M and Dad or excess savings or whatever they got out of um you know excess liquidity from covid by spreading mortgage terms uh from 25 years to 30 35 40 years um

All of those things are effectively stretching out our affordability and also nominal um house price growth as well as geographically relocating so going from some areas of the country which are more expensive to other areas we’re getting more value okay so there’s lots of factors that have been going

Into propping up those nominal house prices of course inflation um has hidden a lot of those crashes so mainstream media is starting to look quite bullish on property prices of course we love in the UK a property we love thinking that property is a store of wealth and

Therefore we own a house if it’s a home um that is one of the biggest stores of wealth we have by the way that is exactly why it’s so important to understand this because if you view your property or your home that you live in as a store of wealth but actually it’s

Going down in in in intrinsic real value considerably then it’s not such a great store of wealth especially if you’re paying money for you know interest a lot more interest if you spread the terms out Main all of that sort of stuff right it’s not quite the asset you might feel

It is even though it’s going up in nominal terms so let’s look at the right the right move HPI here is the zoomed out so whenever we see those headlines and people talking about property price jumps and don’t forget both Nationwide and Halifax house price index the beginning of January also

Reported in excess of 1% month on month Rises okay so the right move and if I in fact let’s just go to the actual um headline uh so we got a tentatively promising uh new start as buyer and seller activity jump okay so that’s activity uh the one that I saw in the

Mainstream was talking about the amount so something like5 five and a half thousands worth of um uh price increase on the headline rate of that of the right move HPI but we have to understand before I look at the trends okay and go into this graph we have to understand

What this index is and what we are talking about so this is completely completely different methodology a completely different model to both the Nationwide the on and the Halifax which are all honic regression models this is actually just an average price of the listings that go on to right move and

It’s the average price of the listings in the month that they’re listed so it’s not capturing subsequent price drops so when the headlines say 5 and a half thousand or property prices Jump by 5 and a half thousand no it’s the average listing price on right move in January

Or December whatever wherever we’re looking at is January have jumped to buy £5,500 now because it is average rather than a honic regression model this can just mean that the properties that being listed are a lot more expensive right so it could be the a lot more um uh higher

Value properties in the south of the of England when we look at Regional variations there’s some evidence of that are coming on the market and that is skewing it up also when we zoom out and look at this yes we’ve had a little jump but we’re still a long way below the

Peak in terms of um uh in terms of average asking price okay so yes a jump but one month is not a trend we need to understand the trends and look at that big picture and big picture we are still in a downtrend channel there in terms of asking

Prices I would comment however that I because of that perception and because of where people maybe perceive we’re going in 2024 it does feel to me just looking at the various data points that we’re having an unfreezing of the market and that sort of buyer um or seller

Activity is increasing people are now thinking there’s going to be more buoyancy in the market and therefore maybe not sitting on their hands anymore um and placing their properties on the market or it could be that people are sitting on their cheap cheap fix rate debt um and every month you get more

People coming off the cheap fix rate debt those mortgages are expiring and they’re refix like right we we’ve got as much as we can out of this cheap fixed rate debt we’re now on a variable rate or have to refix on a higher now’s Now’s the Time to sell okay because we we’re

Off we don’t have that mortgage anymore now when we look at this okay we can see that the average stock per agent is actually been coming down since uh the peak was sort of September September and October we have average of 54 uh properties per agent that’s come down

Which means there is buying that’s going on or a complete lack of flow of supply coming going on um however this is now looking at December so we’re looking at rear viw mirror here we’re looking at lag metrics rather than lead metrics um this is a lead metric okay 5year asking

Price trend is a lead metric um average stop per agent is a lag metric so something that’s already happened so the reasons behind that could already be gone okay another lag metric but a really interesting one and this for me is probably the biggest one um that that

That I sort of opened my eyes and looked at and that’s the average time to secure a buyer and we can see a pretty much an uptrend from March where it’s stable and then August onwards okay it’s getting bigger and bigger and bigger or longer and longer and longer in terms of

Average time to secure a buyer so that for me means number one that we haven’t had a lot of buyer activity out there okay so as we know and we’re just recovering sort of data that that backs up what we’ve been talking about for the last however many months there’s a big lack

Of um liquidity in the market when I say liquidity I don’t mean money I just mean transactional liquidity in the market there aren’t a lot of buyers out there buying um and that’s getting worse and worse which probably means sellers are still not quite being realistic in how

They want to sell things so those are the large things I want to take out of um uh the right move HPI Okay so let’s not get too fuss about one month up and I say the same when we have months down we have down months we can’t get too

Fuss about down months either we have to look at that big Trend okay and the big trend is still a downward channel from sort of um peak of may end of spring beginning of Summer 2020 um uh 2023 and actually when you look at this you can

See that the the the uptick we’ve just had in January which is always going to have an uptick you know post Christmas people are going to go Now’s the Time to list it’s still less than what we dropped in December okay so we’re still sort of lower now than we were in November

2023 um so that’s right move I don’t want to spend any more time on right move I do want to spend some time um and uh Gordon I can see some comments coming in team as you as we go through please put your comments in I’ll come and have

A chat afterwards um right move be careful of the data uh or be careful of the headlines because of the type of model and because of the big picture view um we have to take that with a pinch of sold so oh in fact sorry it’s

Something that I was going to talk about and just point out before I move off right move and actually I think this is quite quite pertinent is when we look at the regional Trends okay we can see that the biggest I don’t know if you can see

That I don’t know if I can zoom in on this there we go the largest jump um in terms of month on month by a country mile is the southeast right we’ve got a 2.4% um month- on-month increase there in terms of listing price now that of

Course is going to skew uh London negative point4 east of England 04 we got East Midlands 1.2 we’ve actually got negative in Yorks and humo we’ve got sort of a point six um in the Northeast and then on the West side Northwest 1.2 0.4 1.1 0.5 um is that giving us an average

Let’s see if they give us an average the average is 1.3% okay so the average across the UK is 1.3% but I’d imagine a fair amount of that is skewed by the southeast figure of two oh 2.4% so this for me fits the narrative knowing how the right move index works

With average listing price that we’re probably seeing um more and higher value properties in the South be listed at the moment which me probably means as I said one or two things either sellers are um coming off the cheap fix rate and now they need to

Get rid of it or there’s some they they’ve been sitting on the hands for a while and they’re like look we’ve see some positivity Now’s the Time to test the market after Christmas as we go into Spring right which is always the most buoyant um sort of time for sales in the

In the year if you look at the whole year we always have that sort of spring increase so people are probably going to go now is the time to get listed because there’s some positivity um going uh going into the market so there we go that’s that’s right move um what I’d

Like to talk about is the affordability as well because I think it’s an interesting thing now look my view has always been we are in for a longer shallower correction in property prices I’ve said that since I started this channel that rather rather than that crash I’ve never said I see a crash

Coming looking at all the big picture metrics that we’ve got I’ve always said it’s going to be longer shallower doesn’t mean Peak to trough is not going to be um it’s not going to be ASD but it’s just going to take a lot longer to

Get there um and I still think the same in 2024 for the moment in terms of um house prices I.E maybe very slight nominal uh reductions in 2024 but at the moment we’re seeing a lot of metrics reverse and change so we’re seeing again this Push Pull I think it’s fascinating

Where we are on the market that actually a lot of the leading indicators are now suggesting that house prices would start to go up again but we have some contrarian um leading indicators so leading indicators in terms of affordability let’s just talk about that now because affordability is a leading

Indicator unemployment or employment is a um is a leading indicator clearly if employment starts to fall unemployment goes go goes up that’s going to have an impact later down the line so these are things that we’re looking at and another thing that’s a leading indicator is the

Economy right for me is GDP um if we start to going to recession again that’s a leading indicator that is going to knock on to the property Market in the future so although GDP readout is a lag indicator for me is a leading indicator of what can happen to the market so we

Need to be um understand what what’s going on with the economy we need to understand what’s going on with unemployment of course those two are you know intrinsically linked um and we need to understand what’s going on with affordability so let’s talk about affordability which feels feels like it

Might be easing for certain demographics now whenever we talk about these sort of stats and Figures it’s very difficult to go into every single sort of percentile or or 10 percentile um of the uh of the UK population because of course different percentiles and de different demographics are going to be affected very

Differently um we are generally not talking about you know probably the top 10 20% maybe let’s say top 10% we’re probably not talking about the bottom 10% we’re probably talking about sort of the 80% in the middle um for a lot of the middle I would suggest that

Affordability is appears to be starting to ease especially if we have um inflation genuinely coming down but we’ll wait to see what happens uh on Wednesday um energy has certainly come down from where it was a year ago and the price cap we actually seeing forecast of the price cap come down

Fairly significantly over the next couple of quarters um and we’re not seeing a lot else feed into the system right now so a lot of the inflation um even though it was there for 18 months two years maybe we can now say right it was transitory inflation that was there

For 18 months two years um third party shock transitory inflation okay that’s that short Shar boo is always going to resolve itself regardless of what happened to interest rates now of course on the other side of this we’ve got interest rates right and how is that weighing down on the economy so let’s

Talk about affordability and let’s look at where we are with um uh mortgages for home buyers now this is home buyers so if we go if we look sort of at this peak here which was that’s sort of August 23 so summer last year if you remember we had mini budget disaster

Created a massive surge in the swap rates and a surge in morgage mortgage uh mortgage rates which then came down but then we had the sticky inflation which really hit us in the summer of last year and this is the point we’re going okay here we go right we now got massive

Affordability issues uh interest rates were forecast to maybe hit six six and a half even 7% I remember there were analysts from major um Global institutions talking about potential of 7% by the end of 2023 however this is not materialized right and we’ve now we’re now seeing and I don’t want to go

Into the legitimacy of CPI numbers right now we’ll talk about that on Wednesday when the next print comes out but let’s just go let’s just take for red that CPI come down twice um with large jumps much bigger drops than people thought was going to happen and now we’ve seen the

Mortgage rates or the swap rates follow suit uh because the markets are betting the interest rates and Central Bank interest rates going to come come down sooner and quicker than the central banks are saying and the mortgages are followed so we can see a continued downtrend of mortgages and even look at

This right so look at this 60% loan to value toe fix has just has actually accelerated into January that drop down and we’re all the way back down to where we were sort of um you know spring last year and we’re still coming down which is surprisingly still coming down given

The fact that interest rates still at 5.25% if if the swap rates continuing to come down and the mortgage rates are continuing to come down and yes we’ve got two factors at play one the swap rates second is the banks competing against each other so we have to take

Mortgage interest rates and the reason they’re dropping so so um dramatically with a slight pinch of socks there’s there’s heavy competition in the market because of lack of buyers or lend borrowers in the market but it doesn’t matter the mortgage rates are coming down so people who are now coming off

Their cheap fix rate debt are able to fix in to rates that are well below where they were six months ago and that is going to affect affordability or increase affordability for those who’ve got the mortgages so are we through the worst of it right now the data suggest we are

With the trends going down doesn’t mean that that won’t change by the way doesn’t mean that won’t change so that’s mortgage rates that’s the first thing that I wanted to look at this is positive news for house prices because it increases affordability the next

Thing I want to look at is the UK UK composite PMI perchase managers index and again the last set of data for December 2023 right has shown a continued uptrend and if I go on to um let’s just go on to the uh the chart here just to give if

Nobody seen the PMI before it is a almost a litmus test if you like for how the economy is doing um and this is based on a survey of purchase managers so supply chain managers who are seeing you know what’s being what’s being procured what’s coming in um and

Therefore it’s a good understanding of of the economy or forward-looking indicator of the economy we can see after quite a big drop down we’re now on a trend backup which means confidence is returning in the economy which is interesting anything above 50 um I don’t

Know if I can you can see that you probably can’t see that this this line here is is 50 anything above 50 we are effectively um expanding anything below 50 we’re Contracting so we’ve seen three concurrent increases in the PMI which means confidence is improving there

Let’s look at GDP right GDP is still ping ponging around all over the place with no confirmed Trend well the confirmed trend is Flatline right um we’ve after seeing the drop you know quite substantial drop of. 3% in October we’ve rebounded and taking it all back in November which seems to be the

Pattern of things that every time it looks like it’s capitulating and going going into recession a month Pops in um where it’s looking good again now we we have to question this because don’t forget previous months have been revised down very important to understand that we’ve seen this and

Then this data gets revised as more data comes in been revised down so is this another case of the initial data coming in to show that we’re going to avoid recession in Q4 2023 by the way we’ve had a 29% dip in October we’ve had a 31% increase which probably puts us pretty

Pretty level uh if I take um if I take the individual elements out and just have a look at the graph they those have pretty much wiped each other out so December is going to be a big one do we see a a December December bounce right but again let’s just think logically

Through it if affordability is increasing right if uh people’s wages are going up if mortgages are coming down um if energy price cap is coming down does does that give people more affordability to go out and spend more stuff and is that actually going to start to have a contrarian or

Conflicting pushpull with the interest rates going on um so that’s another question that we’re going to have to ask not today but I’m just want to throw some things out at you today there’s a lot of data catch UPS I’ve been away for five days what I would like to do

Actually is just just show you this for construction because we are talking about this mainly for for property uh the property Market this is a property Channel um if you look at con constuction uh property Market is inherently linked to construction of course house building all that sort of

Stuff the construction industry is not looking good this is not looking healthy at all in the slightest um I spoke over the weekend um an this is anecdotal of course uh to a friend of mine who’s a property developer they do sort of I would say mediumsized sites so anything

From I don’t know sort of 7 to 10 properties to 30 40 property sites and he said they’re really struggling to find any sites at the moment that actually work in terms of a figur point of view but they have to keep pushing forward they have have to keep um buying

Sites because they’ve got Lads if you lose all your Lads um then you’re never going to get them back they’re going to go and work for somebody else You’ got to keep the machine ticking so a lot of these companies are are are buying land over the odds just to keep churning out

Stuff even though they’re not making huge amount of profit um and a lot of that is due to the cost of Labor and the cost of materials right now and you know if you look cost of Labor has gone up cost of materials have gone up house

Prices have come down so that margin for a developer has gone smaller smaller smaller smaller there’s not a lot of mar in anymore especially as a lot of land Bankers land owners are you know only wanting to sell their land for probably more than it’s worth so it’s quite it’s

A challenging place and this is a subject for another video is can we ever get back to building enough houses to um sort out that Supply demand issue so another thing to talk about so that’s anecdotally in the construction sector okay let’s go back over here um

Production by the way is also not looking particularly healthy but we are definitely being underpinned by our services so so I don’t want to dive into all of this this is just a sort of summary of everything we got going on so let’s just recap so we’ve seen um right

Move talk about a bounce up we’ve seen both Halifax and Nationwide to talk about a bounce up we’re seeing mortgage rates and affordability uh well mortgage rates come down affordability go up because of that price cap go down affordability go up more um inflation potentially coming down all the

Indicators are looking positive in terms of property Market you know when you put all these things together the theoretically there should be a bounce coming in the property Market Bank um of Bank of England and you know I think where we see inflation on Wednesday is going to start to give

Us a better idea of what’s going to go on with interest rates um his tone bayley’s tone seems to have changed I would say over the last few weeks he seems to um be implying that maybe that sort of up at the top and not moving

Down for a long time might not be the case um he seems to be saying now now because they do want to hang on to that sort of um caveat all the data is showing positive he’s saying that the uh Global shocks are the biggest threat to the economy right now so actually

Internally he thinks things are pretty pretty good or that’s the narrative he’s putting out and of course at the moment we’ve got the Red Sea um so we’ve got conflict in the Red Sea we’ve got effectively military action that we’re participating in the Red Sea what effect

Is this going to have is that going to lead into any more escalation we’ve still got Russia Ukraine um so we’ve got multiple things you know going on what will be the Fallout of that and right now we don’t again we don’t have a clear clear direction if we look at the price

Of Brent it’s not going anywhere it’s not spiking um so this isn’t filtering into the system so right now we’re not seeing huge supply shocks um to oil supply or anything like that they would feed back into the inflation figures um and uh and push that up again so right

Now even this is looking like the inflation will continue coming down um only other things I wanted to talk about before I go over to uh uh to questions um is uh unemployment so we’re expecting the next unemployment release or sorry the next employment release to come out

Uh 16th so same day as CPI I think this be interesting to look at for those of you who don’t know um basically the respondents the survey have been or the the the the respondents yes the respondents survey been so low the data has been completely inaccurate and the

On have said we can’t get accurate employment data from the amount of survey results getting back they’re using experimental data so we have to take all of this with a pinch of salt but I did catch this um that just came out today which is talk about demand for

UK labor hits lowest level in a decade okay so again this is now another um leading indicator of where the economy is and of course that is going to um have an impact on where interest rates are going as well so we still got lots of conflicting pushpull pushpull things

Pushpull factors which is difficult to understand where we’re going to be going so there’s a narrative of infl of interest rates staying higher for longer um but I think we starting to see a lot of very credible uh reasons for those interest rates to come down quicker than

We think and of course the markets totally agree with that one more thing I want to talk about saw this survey I don’t know if anybody else saw this today um uh yugov survey uh the largest in five years came out that predicted the conservatives are going to

Effectively have a um Extinction event uh at the next election uh so they’re going to be wiped out and this is the results of the survey um and one of the biggest aspects that is uh at the moment on course to uh to create this scenario

Is the reform vote which is going to rather than put more labor people um more labor uh or give more votes to labor it’s going to take a lot of votes away from the Tory so a lot of Tory voters are going to vote reform um which

Will let in Labor candidates and livem cand candidates in a lot of constituencies um and right now this poll is saying a landslide uh for labor with a vast uh vast majority whereas the if the reform vote was taken out okay and the reform vote went to uh went to

The Tories you probably end up looking at a hung Parliament situation so there’s a lot of work for the Tes to do I’m sure they’re not going to sit here um and and just let themselves be wiped out so I think that the more extreme this data comes out I think the more

Extreme the narrative that they’re going to be pushing out as we run up to the next election so I I can I can’t imagine we’ll see anything other than tax cuts whether or not we agree with them or whether it’s the right thing to do but

With the swap rates coming down with the Y yield um uh the treasury yields coming down or sorry the guilt yields uh coming down that gives them more money to play with because they’re not servicing as much losses on quantitive tightening and their big debt burden um and I’d also

See them trying to pull the rabbit out the hat for the property market and have some external stimulus into into the property Market um so effectively I think yes my my my thoughts on this are the worst the figures are for them the more extreme their policies are going to

Be as we run into the elections try and win back um win win back some votes but it’s looking like I said uh I can’t if it’s before Christmas or in between Christmas and New Year that the main Battle Ground for the Tores was going to be affordability actually now it looks

Like it’s going to be immigration um and that’s what the narrative seems to be that they’re focusing more on immigration so we will see what they come up with in terms of uh in terms of policies but that is not looking good for the Tories um uh so we’ll see what

They come out with at the next budget so overview there’s a lot of data we’ve gone through there um my big overview is nominal house prices have not dropped nearly as much as anybody thought people were talking um you know I I I think most most um conservative commentators

In 2023 were talking five to well so 8 to 12% nominal drop in in 2023 we didn’t get it um the more extreme we’re saying 25 30 even 35% in 2023 we certainly didn’t get anywhere near that um what we have seen is a huge correction for the

Last 18 months in real house prices which if anybody cares about what their house their asset is actually worth this is a really critical piece of information and I know it’s all relative so if you’re just buying and selling home it’s not important but understanding that property is a store

Of wealth um or if you’re a property sort of professional entrepreneur and looking to profit from property you need to understand uh understand that and then when we look at the direction for the next uh next I don’t know let’s say 3 to six months it’s quite difficult to

Call I would say all the indicators are showing that we will get interest rates um interest rate Cuts quicker um unless a thirdparty Black Swan geopolitical event comes in um and sends Supply shock back through the systems I think that’s where we are right now and with that in

Mind let’s have a look at what we’ve got in the comments so um by the way if uh there was anything there that was of interest to you please give me a thumbs up um apologies if I was speaking too quickly at any point I know we try and

Cram a lot into these uh these live sessions I I’ve had some comments about speaking too quickly um so hopefully it’s all there right let’s look at some of the comments so we’ got Gordon nice to have you on Gordon I know this very tenuous but after the NSI announcement of a prize

Draw cut from 4.65 to 4.4 at the March draw do you think the bank of England have tipped them the wink of an IR cut in uh interest rate cut in April um I know we’re probably going back quite a lot in the questions from the live

Stream now um I I I would say Gordon it’s rather than a tip the wink I just think it’s the market uh the market makers are are um dictating swap rates um savings swap rates all of that sort of stuff are linked to the swap um and it’s effectively how the institutions

Lend to each other so if the swap rat is coming down you know interest rates generically on uh savings accounts mortgage accounts will all be coming down um so I think it’s just an industrywide thing and actually a lot of this um we have to disassociate or or split the

Where where the sort of yields are in terms of like guilt yields right and swap rates and the bank of England central bank rate because they are two separate things and understanding that is quite critical because mortgages saving rates are not based on the bank of England base rate right they’re based

On the swap rates and um things like excuse me government lending and what they’re servicing and the amount they’re servicing on their debt pile is linked to um uh yields guilt you know um yield values on um on on uh guilts and things like that rather than the bank of

England base rates they are two separate separate things don’t if that answers answers the question uh Stafford it was odd to see lenders drop their rate uh a day or so after the bank of England had been in front let me just put that on been in

Front of the select committee and state they didn’t expect to drop rate soon well you can probably just look at whatever the lips are saying and go the other direction can’t you so if they say they’re not going to expect to drop rate soon it probably means that they are but

I also agree when you said lenders are getting desperate for trade Stuart let me put this on the indices might show little change in HPI over the last year but property isn’t shifting property that should have sold in early 2023 has been sat on the market since the summer

Yes um and I think this is important important Point um Stuart if we again go to let’s just go back to uh the right move 8 Pi effectively what we’re talking about is is this graph this graph here now don’t forget these are averages okay everything here is

Averages so if you got some at 71 days you’re going to have you know some that are priced appropriately are going quicker but a lot that are sitting on the market for a lot longer than 71 days um and it this very much depends right on if you’re motivated to sell now what

This shows me by the way is the fact and and almost perversely I think it shows a a stronger Market or a stronger um climate for the property Market than if things were going quickly because if stuff is sitting on the market for a long time and it’s not

Shifting it means the motivation to sell is low because if the motivation to sell was high then that property would be slashed in price um to get it away and by the way that is what dictates property Market changes is property markets when people need to liquidate quickly right people need to

Liquidate quickly if they um are going to get repossessed right so so the bank are coming to repossess and they want to save the equity that they’ve got left um or you know well I mean basically that’s generally a lot that’s generally the main reason people need to sell quickly

To release equity and the quicker somebody needs to sell the more of a haircut they’re going to get right so if you don’t need to sell quickly you can put your property on or what you want to get and just leave it there and you know

Somebody might come come over and buy it at some point even if it’s six months in the future or or 12 months in the future you know you might just get lucky and get get that one so it’s that shows to me unmotivated sale you need to sell

Quickly you’re going to have to drop your price you drop your price the the whole Market starts following Su because then you got your comparables you know properties are selling cheaper if they’re selling cheaper on mass when when you go and appraise a property it’s like well that one in that street is

Just sold for let’s say they’ve been selling for 100 grand it’s like oh actually that one just sold for 135 Grand so we’re going to place it at 135 Grand then if you need to sell quickly you sell at 130 and it continues down that that that spiral so yeah that’s my

Take on it my my take on this um uh slower slower market and don’t forget we’ve got really low transaction volumes as well so this has also um been skewing things so there’s just no buyers out there so the sellers who are trying to sell are not that motivated but there’s

Not a lot of buyers everybody is sitting on their hands or have been sitting on their hands which shows there’s no forced selling regime and forc selling regime is the biggest thing that’s going to crash the property market now that might change if we suddenly go into a deep recession and unemployment spikes

Up okay that could change and all of a sudden somebody loses their job they can’t service their mortgage anymore they’re going to have to sell trying to get the equity out as quickly as possible to go and you know support them or buy something smaller or whatever

Whatever that is now on this article here demand for UK labor hits lowest in a decade there was actually a forecast on um uh if I can find it unemployment rates don’t know I’ve not got my glasses on apologies team when I don’t have my glasses on sometimes it takes a little

Bit longer to try and find try and find things it might be on there and I just I just can’t see it or maybe it was on a different um different article I saw it could have been on a different article however the forecast for unemployment even talking about you know the labor

Market starting to unravel was still sub 5% um you know sort of peing at sub 5% which is still well below the historical sort of um you know mass unemployment figures and I know right before somebody picks me up on this I know that labor figures now and I’m a firm believer of

This by the way and talk about this all the time are completely different when we look at unemployment figures now it’s completely different to looking at them in the 70s for example just as what is class as an employed person you know you could be self-employed you could be on a

Zero hours contract working one hour a month and you still go into that category of employed um for the unemployed basically if you’ve been looking for something a job in the last five weeks and you’re able to start a job in the next four weeks your class does un employed

Anything out of that bracket you’re not working you’re in the you know economically unproductive bracket so it’s quite difficult to compare unemployment now with unemployment um you know sort of uh 70s 80s when we had the the last major recessions that’s an interesting fact so it’s quite difficult

To look at the data and draw conclusions from where we actually are right now again anecdotally I know certainly in scaold world there’s a lot more uh labor looking for looking for jobs at the moment which you know implies a softening because of course there’s no construction going on scaffolders aren’t

Aren’t all all out there working um or new build scaffolders um you know my scaffold company do a lot of Industrial and Commercial actually never been never been busier but the new build some scaffolders um specialize in new build scaffold sites so you know um you know

With Barrett or Pimon or whatever um and that is definitely being hit on a big scale I don’t know if anybody saw that Stuart mil went bankrupt last week which I thought was Major news we’ll talk about that another time so there we go um yes good discussion point there

Stuart thanks for that what else we got uh there we go night Frank I’m going to put this on night Frank revised house price forecast 2024 from minus 4% to plus 3% yeah and I would not be surprised at all if we uh if we do see a

Pop in property prices this year because of all the all the things we’ve been talking about wouldn’t not would not be surprised in the slightest all depends still it all hinges on the economy and what happens to the economy if we escape recession okay and we push everything out to the

Right which by the way escaping recession probably is putting pushing everything out to the right in terms of you know a more cataclysmic event I would see um I would say we will see property price rise in 2024 if we escape recession Rick I’ll ask this one answer

This one question I got to go because I’m on boarding a new client in about 20 minutes uh if we have a mortgage offer via mortgage advisor can we call lender directly change mortgage rate or VI advisor only uh Rick if you got a mortgage offer through an adviser work through your

Adviser don’t um your relationship with with the adviser they’ll have a relationship with the bank speak to the advisor that’s what you pay them to do um is to have those discussions they’ve got the relationships on the other side so just let them do their job and uh and

Go and find find stuff um the only you know caveat to that is this of course you’re working with a bank directly so if you’re sort of um like I work with Lloyds directly with my portfolio I just go directly to them because I don’t have

A broker or an adviser in between me but yeah I would say go through your advisor that’s what you pay them to to do and they’ll be able to get the best rates for you lovely all right team been a pleasure as always so I just wanted to

Do that sort of recap CU I know I’ve been away for the last sort of five days or so get that out there Wednesday we’ve got inflation data coming out and we’ll be looking to go live on Wednesday and crunch those numbers probably sort of Wednesday afternoon-ish um so uh yeah

Looking forward to seeing what happens with that one but otherwise have a good couple of days good starts the week and I’ll see you on Wednesday Oh