Housing Market Crash - 2021 UK

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The UK Housing Market Crash - 2021!

So let's start then with looking at what has been causing this huge boom in the housing market here in the UK...

To give you a big picture overview then, it's all about demand. The demand for UK housing over the last year has been explosive as a result of people being locked down in their homes and many people realising that they actually don't like their home as much as they thought they did.

This led to the mass migration, in particular from large cities to smaller regions such as Suburbs or to more rural locations like the countryside. And this factor is still continuing.

We also have very high overseas investment demand at present in the UK.

We also have historically low mortgage interest rates at present, the lowest we've seen in modern history. This of course makes properties more appealing for people to purchase, because remember people don't buy based on the price of the house they buy based on their monthly payment.

The government also recently announced an energy-saving grant for homeowners combined with 95% mortgages again for first time buyers…

Another problem which I don't feel anyone is really talking about is that a number of business owners have taken out the bounce back loan from the Government and used it to buy investment properties. This is because the bounce back loan was interest-free and didn’t require security! Again, this was another big mistake which has only added even more fuel to the fire and pushed-up property prices.

We then of course have the stamp duty holiday on houses up to £500,000 which ends at the end of March 2021… this is another large factor forcing people to to buy a property now.

When you put all of these together you end up with the most important factor here which is low inventory levels.
The higher the inventory levels = the lower the house prices.
The lower the inventory levels = the higher the house prices.

All of this combined makes for a disastrous situation, and it's only a matter of time until this all comes crashing down once inventory levels start to rise.

- Surveyors and mortgage lenders are now starting to down value properties at an alarming rate, and this is creating a cap on prices if buying with a mortgage (which is the majority of purchases)
- This is all coming at a time when property transactions start to slow down in the Winter time anyway which should and I use that word lightly, only put more downward pressure on pricing.
- Renters not paying their landlords.

Let me explain the significance of March 2021 now then:
We have 6 MAJOR problems to contend with which will all occur at the same time!

1. Furlough: The Government Furlough program comes to an end on the 31st of March 2021.

2. Stamp Duty: The Government stamp duty holiday comes to an end on the 31st of March 2021.

3. New foreign investor tax: The Government foreign investor tax program starts on the 1st April 2021 (i.e, again end of March 2021). This will force many overseas buyers to buy now to not get hit with that new 2% tax.

4. Mortgage holiday: The mortgage holiday comes to an end for many in March 2021.

5. Fear of job losses: Then we have FOMO, the fear of people missing out on their ideal home as they may lose their job over the next six months and will no longer qualify for a mortgage, so with human beings being emotional and not rational/logical creatures, people are buying now at the peak of prices, further exacerbating the situation.

6. Then finally we have Section 24: Many Landlords are now starting to figure out what this draconian Section 24 tax really means for them, a tax that I’ve been warning people about for over 3 years now. Many landlords are finally taking their investment properties to market to sell as quickly as possible because you can no longer offset any expenses, including mortgage interest.

00:00 - Introduction
01:27 - Supply & Demand
02:00 - Lockdown Impact
03:05 - Mass Migration
03:45 - Overseas Investment
05:38 - Interest Rates & Risks
08:07 - 95% Mortgages
09:20 - Green Grant
09:58 - CBILS Loans
10:37 - Stamp Duty Holiday
11:32 - Low Inventory
12:30 - Down Pricing (Values)
12:55 - Tenants Not Paying
13:29 - 31st March 2021!
13:45 - 6 BIG RISKS
19:04 - Conclusion

DISCLAIMER
This video is for entertainment purposes ONLY & designed to help your thinking, not direct it. These videos shall NOT be construed as tax, legal or financial advice and may be outdated or inaccurate; all decisions made as a result of viewing are yours alone.

Видео Housing Market Crash - 2021 UK канала Neil McCoy-Ward