The Truth About Falling House Prices (And Why The HPIs Are Wrong)

Both the Nationwide and Halifax have reported HUGE house price rises for October…

Has the market troughed and we’re now rebounding?

Or is the story very different on the shop floor?

Today I’m running an experiment to see what’s going on in reality…
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[Applause] A very good evening team it’s Rob Stewart with you I’ve got some funky Graphics oh we got a double funky graphic I’ll have to change that it’s amazing how the these things happen right Halifax has put out their HPI today and they have confirmed the same Trend that Nationwide talked about which

Is a bump up uh in the October uh figures compared to September so if you remember Nationwide showed us a 0.9% bump up Halifax have shown even higher at a 1.1% so the question is have we hit the bottom and is the property Market reversing or is there more to it

Is there actually something going on with the hpis are they showing us a really accurate reflection of what’s going on in the UK property market today in today’s session we are going to look into this and I’m going to run a little experiment so as well as looking at the

Data from the hpis this evening what I want to do is I want to go onto the front line and I want to see what’s happening in terms of price reductions and what’s happening in terms of the market movements for actual property listings uh which are open source

Property listings so we’re going to be doing a bit of research and we’re going to be doing it live and hopefully it works so first of all as I always say we are live so I can see lots of Thumbs Up good evening everybody I believe we

Probably are live um and you can hear me and see me which is absolutely fantastic please ask the questions as we go through as always if you’re watching on the replay please put your questions or your thoughts and comments in I’ll always come back to you welcome to my

New subscribers um for those of you have not been on one of the live streams before what I do on these sessions is look at objective data so we can cut through the headlines uh and the BS and try and understand what’s actually going on with the market so we can make more

Informed decisions so let’s dive straight into it um let’s have a look at the actual uh Halifax numbers so you can see we have a monthly change of 1.1% cly change of minus 1.9% which still gives us an annual change year onye of minus 3.2% so the big thing that I want to

Draw out of this is that um the narrative ative is still extremely I would say bearish okay so when you look at the little blur underneath and this is very similar to what happen with the Nationwide um you can see that uh that they’re saying effec I’m just want I would just

Want to try and find the right thing this is likely to have strengthened okay so prospective sellers appear to be taking a cautious attitude leading to a low supply of homes for sale which is likely to have strengthened prices in the short term rather than prices being driven by buyer demand which remains

Weak overall so effectively this is exactly what Nationwide said that even though there is this little um this little tick up it’s all being driven by the complete constrained Supply um of properties on the market if you remember last week when we looked at the Nationwide we looked some of the zuper

HPI um sort of figures which showed the the supply of new properties being listed was actually reducing on a month-by-month basis so so L Stu coming onto the the market not sticking but we we’re still intive of you know basically super tight super tight Market with no

And that uptic uptic so go into how the HPI are actually calculated in a bit in terms of the regress honic regression model but before before we do that let’s just let’s just zoom in on the actual graph itself okay so if we look at this I’ve just noticed actually team that um

I’m just going to try and fix this this is what happens when you play around with things beforehand I just need to make that a little bit bigger so you can’t see the other video feed behind it so when we look at the actual house prices the actual house

House price growth we have seen this uptic but if you look at it I’m not going to chart it we’re kind of in a channel and the channel is still downtrend Channel um so as I always say everything goes up and goes down but not

In a straight line so we are still in a downtrend and if you were to plot a line down the bottom and a line on the top we’re actually quite a nice Channel which is trending down um the actual Halifax report itself said they’re expecting prices to continue down

Through 23 all the way through 24 and probably not see a recovery until 25 so that’s what’s actually coming now out of the mouths of the indexes themselves so n Halifax have come out and they put a bow claim and said they don’t see us troughing until end of 24 beginning of

25 at the earliest so I think that’s fairly fairly interesting um there’s not huge amount else to say it’s a very short report um they’re talking about firsttime buyer Market again shows relative resilience note the word relative and again this just carries on with the oh oh I’m sorry guys we got to

Get these off give me a sec uh this is what happens when you play around uh with various Tech things there we go we don’t want to see those again um the first time buyer Market is going to have some more residance because the rent are

Gone up I know there’s some now people talking about have we topped out in terms of rent growth rents are still extremely high we’ve seen huge rent inflation over the last 18 months to two years so if you kind of draw a line halfway through the country and go above

It it’s actually still cheaper even with higher interest rates for people to be buying than renting um so even though people can afford less people are still trying to buy especially first- time buyers are probably the most buoyant part of the market but it is or relative it’s hardly like everybody’s flooding in

And there’s loads of buyer demand they’re kind of clutching at straws um a little bit there so I think that’s worth noting now I want to talk a little bit about the uh the different um hpis in case anybody is not fully up to speed on

How these house price indices work we do have multiple house price indices we’ve got the UK house price index which is kind of the on data um and then we got the two main lenders which are the Nationwide and the Halifax and then we’ve got the right move so if we if we

Look at this graph okay down the bottom here we’ve got the uh the blue line is the ukp the green is the Halifax and this burgundy line is the nation wide and then the right move index is this dotted black one at the top so you can

See there’s a big difference between the um the right move and the other three and that’s because the three that we generally look at I don’t talk too much about the right move um the three that we look at is called a honic regression

Model now I don’t want to go too uh much about the honic regression model if I show you how they do it okay so this are the sort of maths right that goes into calculating honic regression models basically I want you to think about it that there are there there’s multiple

Elements to a property could be number of rooms could be square footage could be Gardens could be on Suites could be location and all these kind of have an individual waiting within the property and then on a month-by-month basis they combine all of these elements and come up with effectively this this average

You know index so it’s not a perfect model and it doesn’t mean that it’s just the mathematical mean as we would think about it which is take all the actual sale prices add them up divide them by the amount and that’s the average that’s not how it works okay it’s much more

Complex and that which means that the data Maybe does not reflect what’s actually going on in the front line now as I was researching this by the way sorry this is different to right move which is why the right move is so much higher in terms of its actual values

When you look at it compared to the other three interestingly when you look at the other three as I’ve always said the UK HPR and the Halifax have been pretty much in lock step they obviously use a very similar model with the same inputs the Nationwide you can see has

Been diverging probably since about 2015 and actually the Nationwide has been averaging quite a lot less than the uh the the Halifax and the on however I want to highlight something uh that I picked up that I’ve not actually um picked up on before so this is uh if I

Can find it right I want to talk about this is from the government website um and you can have a look at this I’ll post a link if you want to um this talks about the data that is excluded from properties that go into the UK HPI now

Whether or not this then are these same sort of things are excluded from the Nationwide and the Halifax I don’t know this is the UK so this is government on government two different things data you can see here well it’s obvious that commercial transactions it’s residential

Only but this one caught my attention so sales that were not full market value now I do not know and I’d love it if somebody can um you know sort of help me sorry I will get rid of that I’ve got I’ve obviously got multiple um of these

On it’s all good for this isn’t it it’s all good fun um we just might have to see my name every time that I go onto this screen so if anybody else can shed any light of this and how they actually work this I’m not quite sure how they

Work out what’s market value that goes into the data but for me that’s quite a massive exclusion to put into the um to the to the UK on HPI basically what what they’re saying is we’re going to chart the average house price but we’re going to take anything out that we consider is

Below the actual value in itself which is kind of B when you think because a certain distress times like we are a down properties are selling probably than they have been and when when you have buyers when you have to stress sellers sales by you know the sales are

Going to be coming down and therefore you could class that they’re below their market value you know if somebody needs to sell their house quickly um to facilitate sales s rep possession something like that they’re probably going to sell it quickly but below market value so if all this data is

Being excluded from the UK um on HPI is this then skewing the data and giving us a really accurate accurate figure that’s that’s sort of an interesting that I want to talk about um so that that was the big thing that struck me um we’ve got some we’ve got some other things

Here which is you know sort of less important but there is also uh we have uh repost so where was this by way compulsory purchase order cour court order um so effectively court order and things that are more than one property so people are buying portfolios for

Example that’s going to be excluded from the data so we’ve got quite a few exclusions in that so therefore when I look at this data kind of go what’s actually happening here um what is the reality of what’s happening on the shop floor and how can we be sure that these

Graphs we’re looking at are actually giving us the correct data so what I want to do um is first of all work out how to put take take that off oh no oh I see what it is it’s it’s a different thing right ignore um before we look at

This exercise about we’re going to Crunch what’s going on on the front line I want to ask you a favor this is the time where I ask my one and only favor um of the session which is to help me grow this channel as you know I spend

Lots of time researching these uh these presentations these lives and the pre-recorded videos to get this data to you so you can make more informed choices I want to be able to do that more and have more resources that I can put into this and the only way I can do

It is if the channel is growing because that’s what YouTube likes and the bigger the channel is the more reach it gives the more people we can reach the more I can help you so the only thing I’d ever ask is for you to subscribe to the

Channel if you haven’t already so I’ve got my second overlay of the day um so please do subscribe to the channel if you haven’t already I know it’s really easy to come and watch videos and say that’s awesome content and then don’t sub don’t subscribe so you don’t get to

See the notifications in the future and only 0.01% of views turn into a subscription so it’s the only favor I’ll ask and in return I’ll cut you a deal that I’ll continue to work tirelessly to find out what’s actually going on and talk about the actual figures behind the

Headlines so we can make big decisions that’s all I’ll ever ask of you okay please do that now if you haven’t so back to this and I’ll probably leave it on this for for a while so we don’t have the other one going on um I’m going to

Do two things right I’m going to look at right move um and then I’m going to look at two pieces of prop Tech that I use in my business by the way give me a thumbs up if anybody is using either property data or property filter can you put it

In the comments give me a thumbs up I’m interested to know if anybody else are using these pieces of software but they are great tools for Analytics to actually see what’s going on in the market and actually to accelerate the process to find um to find property

Deals if you’re sourcing property at the moment what I’ve done is I put links to both of these pieces of software in the description and after we come off the live uh what I’ll do is I’ll put it in a pinned comment as well because both

Pieces of software um you can get a two- we subscription free free trial uh to give them a go give them a a whirlwind if you want to do that so I’ll put a link up for that in a bit so what I’m going to start with is I am going to um

I’m on right move right now and I’m just going to draw uh an area around the whole of the UK okay so I’m going to do this really crudely so we don’t take up too much time um it’s not a perfect system and I’m not perfect at scrolling

When I’m doing lives as well so uh the data on right move I want to look at um England Wales Scotland and Northern Ireland markets and this does go let’s just go up here I don’t know how much stuff is going being sold further north than that which gives me basically

Search area of the UK and I’m going to search on the on this area and see how many properties we have for sale that are listed on right move now it’s obviously not going to show them all on the map but if we look at the bottom

Right you can see at the bottom there it says too many properties here 437,000 properties listed on right move right now okay so rather than troll through the right move data and look at how many of these are potentially distressed or below market value or have price reductions I’m going to have a

Look at a couple of pieces of software that can tell us what’s actually going on so if I go on to um Property Data um property data has got several sections to it we can research and do analytics we can actually Source property and we can actually stack up the deals that

We’re looking at so I’m in this Source element here and there’s various strategies we can Source by and Property Data um what I want to do is source or have a look at properties that have their price reduced now again property data is searching the full UK Market

It’s got an algorithm that pick picks everything up and what this is showing me I don’t know if you can see see this is that uh we have 34716 properties that are reduced by 15% or more since the first listing so again let’s just go rounded let’s say it’s

35,000 now if we go back to where we had here we had 400 let’s call it 440,000 for e uh and we’ve got 30 let’s say 35,000 for E it’s not far off 10% of the properties that are currently listed on right move that have now had reductions of 15% or

More and for me 15% sign which is interesting because last week z z four regions are now showing price Falls year onye price but this but this you know um this is listings um is it listings or sales to the zup I think it’s it’s sales actually but we’re not

Seeing those of more than 5% but these are going to filter in so if we’ve got almost 10% of the market now has um prices reduced by 15% for me that is fairly considerable because 15% is a large chunk of properties that been reduced by that amount if you actually

Look at the data and this isn’t showing it if you look at the data of properties that probably been reduced by you know 5 to 15% i’ would imagine it’s going to be you know at least that much again if not you know sort of double that amount so

When you start to add that up right we are seeing huge amounts of property reductions uh across the board so for me that is showing a distressed environment that we’re working in okay um by the way there’s lots of things you can see on this have a you know give give it give

It a test drive if you want to give it a test drive um go and head over to this link I said I I’ll pin it afterwards it’s property data. co.uk RS you get a two-e trial on property data um give that a a little

Will um the second thing I want to do okay is I want to go back to uh right move this time rather than going on um the whole thing I’m going to want to have a look at Chester because I’m going to now compare it with some some other

Stats uh and if we zoom out of Chester and what I’d like to do is put a circle around Chester let’s just go 10 miles around Chester that’s probably a good amount so you can see again down here is giving us by the way I I put Chester in

Because that’s my investment area so um if uh I invest kind of around here into elare Port nothing to see it’s not a good investment area everybody stay well clear of Chester um but I’m now going to go over to uh this toour called property

Filter now property data for me I use my analytics so we get lots of data about sort of average average prices by room by price per square foot you can see spreads spreads um distribution curves all of that sort of stuff property filter is then what I use to effectively

Source and pipeline my properties So within this um I’m going to go in here and do something called a add a new leads generator um and I’ve already got it sort of um sort of zoomed in on chest cus again that’s my area so it’s kind of

Defaulting there and what I can do is just select these postcode areas all right and let’s just go that’s probably a bit too far out actually if I compare the two I’m I’m roughly we want to go halfway onto the we’re all just into Liverpool I’m trying to do roughly the

Same geographical areas uh to do a good comparison that’s probably fine um now we can filter this by lots of different methods depending on what we’re looking for uh let’s say I just want to find things doesn’t really matter to be honest let’s just find no template at all let’s just let’s

Just let’s just look at everything and let’s just look at this as test right so I want to save this leads generator oh pleas oh I’ve got to say it’s got to it’s going to make me select a strategy so what I’m going to do is

Look for let’s just say things to flip all right I’m going to look at things to things to flip so if we look at the test and I come in on this and check the leads what this is going to do is it’s going to show me what we got on the

Market that M makes or meets this criteria now what I actually want to do is I want to expand this out sorry I’m just uh trying to find out how I edit this should be fairly easy but there we go there’s the filter and I I want to

See a lot more a lot more sort of properties here so I’m just going to What I’m going to do actually team is I’m going to go back to this I’m just going to create a new one do the same areas and I do want to put my own filters in and just put everything so I want to see all of all of the market on

This there you go should have done this should have done this should should have definitely done this more uh do you know what I actually have got one with price reduction so let’s just go back into one so I made one earlier we’ll just go with this one there you

Never never do live software uh when you’re doing a doing a YouTube live so what this is it’s the same geographical areas okay and I’ve actually got it filtered at the top for leads with price reduction so if you remember if we come over here to Chester we’ve got about

4,000 in the area okay and if I look at this we’ve got properties that are back on the market and reduce so this is going to give us a basically a star rating for how hot this particular property might be if we’re looking for deals so we go from five stars down to

One star now properties that back and reduced means properties that have been sold or been withdrawn from the market but have now back on Market so generally something that has a sale going through for for whatever reason that has fallen and it’s back on the market reduced so

So you can see in that geograph we have 475 properties okay that are back on the market after having had a sale agreed and reduced so again compare that to right move that’s over 10% so over 10% of those properties have had a significant price reduction now

Properties that are just back so these are these are properties that had a sale on it doesn’t have to have a sale on it could just been removed for whatever reason and back on the market but that’s unlikely had a sale on but back on the market

887 so that is over 20 20% in fact well over 20% actually I think this this area is probably slightly smaller than the right move area and reduced right these are all reduced properties in that geographical area 1,610 almost 50% of the properties in that

Geographical area have had a had a had a price reduction on them now these are properties that have been on the market for greater than 90 days so greater than three months 298 don’t worry too much um about the new new on the market less than less

Than five days but sold subject to contract that haven’t sold uh so had an offer on within 70 days but haven’t sold or so after 70 days haven’t sold or a thousand so you can see number one how many properties are sort of dragging their heels to go through the

Conveyancing process but this for me these stats are very telling to have almost 50% of that stock having price reductions shows that seller motivation is absolutely ramping up and you know um properties falling through 887 just in that area is a significant amount of properties so when we look at this I’m

Just going to come off here for for a moment um oh I love it live TV right um when you look at that that does not correlate with a little blip in the two hpis with the Nationwide and the Halifax HPI that to me is quite a significant disconnect

Between what is going on on the shop floor and what is going on with the hpis so for those people who are in property and that are looking for property and actively sourcing at the moment opportunity out there there’s a lot of people now whether of course a price

Reduction does not necessarily mean that it’s now kind of comeing down to below where it should be it could have started at an unre unreasonably high price to start with and that’s probably quite likely there’s probably a lot of sellers pricing originally pricing their properties too high for the market

They’ve been caught out and they now having start dropping it but we are seeing that increased uh increase shift to the sellers wakening up reducing we’re seeing a lot more properties falling through and that’s what’s happening in the shop Flor and certainly that is without a what I’m

Seeing when I’m on the shop floor because we’re sourcing we’re buying um we recently had a uh a deal agreed at a property that was listed our offers over a million and the vendor wanted 1.1 mil and we agreed it recently agreed it and it’s going to be convening right now at

98,000 so that’s a significant discount from where the listing was and where the original um the you know the original vendor expectation was so that’s a when you look at things as a price per square foot that’s a significantly depressed price per square foot on the properties

Uh we are we are looking at so that’s what I wanted to cover today um I’d love to know your thoughts on that um by the way if you wanted to uh I’m I’m not going to go so I don’t want to have those those things um come up again I’ve

Got a work hour to use this software I’m going start using lower thirds and all that sort of stuff what’s your thoughts what are you seeing on the shop floor I’m going to go through some some comments um we’ve got M Duffy more than 75% of listings in Bournemouth a price

Reduction Flat’s been on 12 months or more uh oh some people saying audio has static on it is that still there is the audio static still there apologies if the audio is not good let me reduce it sorry I didn’t see that Richard let parade no worries um so everybody saying

They’re seeing huge amounts of price reductions uh Nick are you trying to say they’re fudging the numbers to keep house prices up um I’m not saying I’m not saying they fudging the numbers try and keep house prices up I think when we look at the hpis um

Nick people who put out hpis have an agenda the banks have an agenda so Nationwide and Halifax are lenders lenders have to lend money to make uh to make money right if we see and it’s not a credit crunch it’s almost a market crunch right if we see this Market

Crunch happening nobody’s buying nobody’s taking mortgages I say nobody of course there are some but when you look at the mortgage approvals they have dropped dramatically um and you know the last month’s data was what 43,000 uh in terms of um approvals which is like only just above where you were

In the credit crunch of 2008 banks have to lend to make money yes they’ve been making quite a lot of money by not putting the interest rates up in savings accounts for example probably arbitraging that um but they have a vested motivation to get people to be their customers they’re just

Private private organizations they’ve got costs to run they’ve got a p&l to run um you know all of that sort of stuff so I’m not saying they’re just directly making the numbers up um but you know when you look at what’s going on with the figures you don’t know

Exactly what’s going into the figures don’t know how exactly that honic regression model is spitting out things and imagine they have a model that’s going to be favorable for them because it’s their agenda it gets eyeballs on them um I do think what’s quite is is both of both the Nationwide and the

Halifax what’s really me is the fact that both of them come out and said Cate that this this lip up in prop in price is because of a constrained supply of new property so tiny Supply transaction smaller which is going to skew the data anyway um and it’s not because of buyer

Demand so however their model Works they’re looking at that data and going right it’s not just SC loads of people coming and buying because nobody’s selling and that’s having an impact onto the model and they’ve both come out and said that they expect property price to

Continue to fall through 2024 now so I think that’s the biggest takeaway uh that I want to take uh take away from that uh good evening 555 um 555 says we need forced selling for prices to crash uh yeah that’s absolutely right 555 totally agree with

You um I for those of you who are new or watching this new probably most people on the live are probably regulars but if you’re watching on the replay remember there’s three things we need for that property crash we need affordability issues which we have we need unemployment sorry well let’s let’s go

That last we need negative equity because that acceler the whole process because if people are forced on negative equity it makes it really nasty spiral for people but the big trigger that we’re not seeing now is the unemployment figure regardless of how fudged we think unemployment is um the labor market is

Still tight enough to mean that people have liquidity to be able to to pay these higher um you know higher mortgage interest rates we H we are not in a position where we’re having four Sellers and that is been compounded by the fact that banks are holding off on their

Repossessions with the charter uh with the government uh okay Richard think it’s listings for Z Plankton as they wouldn’t have access to price sold data um was was that a typo Richard zo Plankton I do like it uh the trouble is the HPI data continues to fuel unrealistic Sellers

And their expectations yeah this is this is true and look this is why we do these and this is why I want to come and look at actually the reality of what’s going on because a lot of people could pick up the paper and go Nationwide showing house prices up Halifax showing house

Prices up we’ve hit the bottom we’re bouncing up right we’re on recovery there’s plenty of of commentators out there who do not believe that we’ll ever see a crash let’s just forget for the moment that when we look at inflation adjusted figures right we are in 15 16%

Negative territory year on year for all from Peak not year on year Peak to where we are now um we’re coming up to the 20% Mark in terms of real inflation adjusted price uh price reductions that means we are in a crash it’s just a real value crash and actually interestingly that

Means property is pretty affordable right now from actually in an inherent Value Point of View when you compare it with people’s nominal wages right so as the investment Community I’ve been saying it for a few months now we are in or getting into the phase of accumulation some people will be sitting

On Sidelines and not touching it I know that some people going look I think it’s going to go down 20 30% from here they don’t want to touch it fine um if you’re not particularly fussed about house prices like overall house prices and you’re more you’re more you’re more

Worried about individual property prices that you’re buying are getting a below market value getting a price reduction but more importantly getting a return on Capital which means we can add value recycle Capital out let’s just temper that with the interest rates and then generate a cash flow from it if you’re

Looking at return on Capital the actual headline property price is very is not relevant in the slightest so you know for me accumulation phase right now because historically and I’ll do another video on this not today probably next week when we look at the real inflation or so the inflation adjusted house price

Graph when we’ve seen a for long period in fact what I’ll do just give me a sec cuz I think it’ll probably be worthwhile uh getting that out just so you see what I’m talking about give me a sec there you go this one can we see that right so this is the

Graph I’m talking about this is the inflation adjusted house price right so we are all the way down here at the moment significantly below the red line which is which is the trend line um you can see that actually the last time we were this far below the trend line was

Down here which was the you know the crash from 89 that kind of took us um to the mid90s and from the mid 90s right let see what happened what what happened there you know we do get that spring effect it kind of compresses compresses compresses at some point the economic

Conditions will change right we are not going to stay in I’m not going to say say recession not not not in recession we’re not going to stay in this this challenging economic um scenario forever we’re not going to stay in high inflation environment forever right we

It will come down we know this it’s just not come down yet it’s still sticky but it will come down it might be three years four years five years 10 years but it will come down at some point right it’s probably going to come down quite rapidly next year in 2024

Um we’re not going to stay in this environment forever even though interest rates are high at the moment which which they are compared to the last 15 years they’re going to come down they’re not going to come down to where they were but they are going to come down even if

They settle from where they are now what 5.25 even if we see another couple of ticks up 5.5 5.75 and then we tick down back to four three and a half it’s a long way that’s a long way down from where we are now when that happens which

Again could be two three years time excuse me we’re going to see that spring go like that again okay so there to there big rise now the the other one we’re looking at by the way this is this is interesting because really that sort of period from the ’90s

Correction uh up until the 2008 was the real big trough to Peak if you like when we look at it here and again this is inflation um inflation adjusted so I just want to get rid of that when we look at the the trough for inflation adjusted these these are real house

Prices not normal house prices to the peak sort of following coid um it’s actually a lot less than than the first one so we can still see that it’s it’s springboarded up but not nearly as much as we saw um you know from sort of uh end of the

80s to the trough of mid90s up to sort of 2008 will we that sort of springboard again I don’t know we may we may we may not but looking historically or pretty cheap here in terms of below the line yes we are so so I feel with a long we

Want to be in the accumulation phase as long as long your property can add value to so buying it at the right price you can add value to with all the mechanisms we talk about um and as long as you can generate cash flow that gives you a significant return

Above interest rates at the current level those are the two things look very quickly uh if you want to know how to do all of this um please download the white paper I’ve got it’s a free pdf it goes through the strategies that I um talk

About and teach right now of how to actually achieve this what’s working well in the current market what I would not buy what I’d be avoiding with the barge pole it’s robster at global.com hyphen paper um take you about 20 minutes if you haven’t downloaded it already uh give it a go um

And have a look at it so yeah that’s my thoughts on that sorry got to go through those again um let’s see what other we other questions we’ve got uh Sean problem with these regression models is that they have been trained on historic data where house prices have largely

Been growing soon as we go into serious down so they fall apart I think that’s very true Sean and I think I think the narrative uh that we’re seeing is because of that so both hpis are saying yeah look we’ve seen a tick up but actually all the the data sets

The environment we in are not designed for these models so let’s just take it with the pinch result um I apolog I apologize about the uh about the audio guys I’ve got absolutely no idea what’s going on with it everything here I’ve got is showing that it’s working it’s

Working correct so I’ll have to have a look afterwards about what’s causing the audio issues um I don’t know if it’s an internet connection is the video all right I’ll try and work that out uh apologies magic says they might just print money again they might do not just at the

Moment I think we’re still en tightening for some time it’s interesting so I was listening I was listening to podcast today on my way back from Chester which I did this morning there was talking about um probably about once a decade we have an event that nobody sees coming which is

Sort of you know a global catastrophe if you like that triggers these sort of things so over the last sort of 20 30 years we’ve had um uh we’ve had Co we’ve had 911 um we’ve got sort of Russia Ukraine war I mean in the UK we had brexit we

Got these things that stimulate well f 2008 financial crisis so if you think about that 911 2008 coid probably one once in a decade events which nobody sees coming nobody can mitigate for uh other than sort of have a load of liquidity to be able to

Ride this sort of stuff out but these events are what cause things like quantitive easing right money printing to stimulate economies um can we foresee them no we can’t because if anybody could then we’d all be very successful can we structure our portfolios our investments

To ride them out yes 100% we can so if we make an assumption that these things will happen if we mitigate that risk by having buffers having liquidity making sure that any property we have has got cash flow that is significantly above our you know current current lending

Rate stress test it all I always used to have a big issue with people in the training industry property training industry you used to talk about refinance refinance refinance refinance property goes up refinance pull it out you got more debt you got more debt you know always want to take on more debt

And then you just take it to your deathbed that’s fine but what happens if you can’t service that debt I’ve always personally kept my leverage about 60 65% loan to value across my whole portfolio of course sometimes it’s fluctuated above that as I’ve bought new things but

Then come down as a add added value to things I’ve bought um but that that strategy has definitely been proven to be working in the current environment with interest rates going back up those people who are at super high leverage in their portfolios are really struggling right now doesn’t matter what they say

On social media right about oh look we can still pay the mortgage doesn’t mean they’re actually still leading any sort of any sort of Life uh Trish says greedy estate agents feeding delusional sellers um I I think we we surely are seeing a turn a corner being turned with that um

Look up Martin Armstrong and his prediction is that until 2032 we’ll be in the falling housing market cycle yeah that’s interesting so I I mean personally I’ve said for a while now that I would see real house prices falling I think for seven years from

Peak that what that takes us to 2029 if we go Peak or 22 29 for real house prices now of course that doesn’t mean that nominal can’t be going up if People’s if there strong wage growth nominal wage growth so we could see nominal going up real going down

Depending on on the factors or we might just see it all go down but it’s certainly I I last week I talked about there’s some prediction is saying by a macroeconomic think tank or research consultancy saying they predict that we’ll be back to 2022 Peak by the end of

24 I can’t see that happening anyway uh Nick agreeing there’ll be more QE money printing lending to businesses paying for public services we back up don’t know if anybody’s still on let me know if anybody’s still on anybody still on give me a thumbs up if you’re still on says the people still

On if there are that’s quite incredible let me know very bizarre YouTube has done something very very bizarre today I’ve never seen this oh yeah we’re still [Applause] on sorry about that team if anybody’s still here I’m still live I’m going to end it 30 watching um well that kind of

Ruined everything didn’t it I’ve never seen that before my internet stopped just had to reset the router the whole thing’s hung up um what I’ll probably do because I don’t think this is even going to sort of play on the replay um I’m going to probably hit stop and uh what

We might do is reconvene tomorrow which is uh which is Wednesday tomorrow evening go again um look at it all without all of those issues maybe be a bit more streamlined and we can get into a better better conversation um unless anybody else has got any questions now

If we want to go through any of the stuff we just spoke about um by the way absolute credit and kudos to everybody for sitting there for five minutes no inter internet connection waiting for this to come back on I do appreciate that um let me know if you got any cues

Because otherwise we’ll go we’ll go for the summary just like playing around with this now um the summary which is UK HPI Nationwide HPI Halifax HPI are showing funny things at the moment as we had with some excellent comments today on the live stream these indices are designed very much for upwards market

And higher transaction volume with the lower transaction volumes there instability uncertainty in the market they’re throwing out some fairly figures when we look at the figures okay we’re still actually in a down Channel quite a defined down channel so we’re going to see what’s going to happen because both

Industries are still saying we’re going to see drops for the next year um we then looked at uh all of the property price reductions properties that have fallen through on a couple of bits of software and it’s showing that what we’re seeing on the shop floor is very

Different to the reality that the indices are showing okay that’s it that’s what we got um s you you stuck with it awesome live TV it’s like don’t work with animals and children live is always fun that’s why a lot of YouTubers don’t go live by the way it’s all fun love it

All right team I might do this again tomorrow we’ll see if it records or not and puts itself out on YouTube if it doesn’t we’re going to do it again tomorrow so in the meantime um I look forward to seeing you tomorrow uh or maybe I’ll just pre-record going through

That uh tomorrow if I got time but I won’t I’ll go live have a good one team it’s always been always been a pleasure oh oh sorry Chang is coming Miss beginning know what your outlook is for 2024 house prices and where the bottom might be 32 Mill question s

So what earlier with my prediction house prices is I can see with you history right I’m going to go back through uh through this which we were we were talking about when we look at real so inflation adjusted house prices let me just get some of this scribbling

Scribbling off here so we can see it a little bit better the to trough so when we look at 89 to that trough okay when we look at 2008 to that trough um 2008 or 2007 to that trough was six years so we had a s year and a

Six year I could see something similar happening in terms of real house prices so if we peaked in 22 I think it’s not unreasonable to see real house prices trough out in uh in 28 29 which seems an awfully long long way away um but when you look at that it is

It is Al is still possible we can see nominal house prices rising way before we see those real house prices um start to rise again so I always said that um the max pain for the housing market is going to be the second winter uh after

After the peak so the second winter of cost of living crisis now we’re going into that now interestingly um we right now we’re having a very mild start well we’re at the end of the Autumn starts the winter very mild so I I think we’ve got the utilities covered

Unless something happens right we still could see supply side shocks through Russia and Ukraine um through what’s happening in the Middle East if that starts spilling out but I don’t think there’s any immediate threat for us to see spikes up in utility prices and that’s probably one of the main things

Along with petrol or oil that’s going to feed back into the sort of inflationary data um and so therefore you know I think we are on the on the down curve here however we’ve still got lots of people coming off their fix rate debt cheap fixed rate debt and will have

Another about 1.6 mil come off cheap fix rate debt between now and the end of 2024 so people are having that pain sort of increase when you look at numbers um I would say for the next six to 12 months okay and then everything’s going to start to normalize a bit so I’ve

Always said in nominal house price terms I would not be surprised if we see uh if we see a start trough mid to end of 24 i’ take that with a pinch of salt so many things could happen between now and then if I’m to honest um but what I was

Saying earlier is I actually I’m going to come off this um I’m not particularly fussed for me as a property investor which is different I understand to people buying for you know a home a primary home where you’re going to have different motivations to buy as an

Investor it’s not like stocks and shares it’s not like you’re trying to time the market you’re trying to you know um obviously you don’t want to buy high sell cheap but when you’re doing this professionally especially if you’re sort of cash flow style investor the actual headline price is less relevant compared

To the amount of value you can add what you can recycle to how much cash you leave in a deal and then the return you get on that cash and of course if the very strategies we use um to add value that we don’t even need to do physical

Works to a property if we’re doing things like sort of leas free engineering balance sheet hacking um shuffling paper around are my are my favorites or adding adding units adding you know sort of um carving things up um is a good way of adding value all of

Those things then we increase cash flow with models like house multiple occupation High to units going sort of um I call it wholesale to retail as a strategy shortterm lets we can get much higher cash flow so as an investor I’m always looking to maximize return on

Capital left in a deal and actually the headline property price is pretty relevant in that yes of course it helps if you buy something at a load value and then the market takes it up even further that’s not a bad thing right we’re not going to say you know we’re not happy

About that but it’s not the prime consideration when I’m at analyzing deals I never ever ever consider any Capital increase um in that property so which is why I’m personally in the accumulation phase right now we’re out there we’re we’re buying things um went into cash on a few Investments last year

Uh kind of ready for this and I feel it’s time to be deploying that um deploying that right now so yeah I don’t like to predict because I think people who predict and go oh property prices will trough you know third of August 2024 I think that they’re just guessing

I don’t like to guess um I think the trend is uh probably going to be going most of 2024 maybe even because happen in shallower and longer than maybe originally expected because of the high inflationary environment which is masking a lot of it in nominal terms we

Could be into 2025 beginning of 2025 which seems to be the same narrative that um some of the analysts are coming out with as well so that’s my thoughts on that no worries all changes coming good um we still got 40 people on I am going

To I am going to call it day that I’m going to knock it off uh if I’ve got a feeling the only thing that’s going to go to YouTube is this last 5 10 minutes or so so if that is is the case I’m just going to rerun this tomorrow and we’ll

Go through again all right um so have a great evening apologies for the technical issues I don’t know what happened there I think the routa needed a good kick up the backside I saw some people saying um kids playing Call of Duty probably isn’t far from the truth

Um but there we go what we can do I need a booster down here in uh in in the office so um I’ll probably see you tomorrow please tune in again all over again say the same stuff it’s it’s been um and I look forward to seeing you very Soon w