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The economic impact of Covid-19


Genie

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UK house prices were 0.1% lower in June than the same month a year ago - the first annual fall since December 2012, according to the Nationwide.

The building society also said property values had dropped by 1.4% compared with May as the coronavirus lockdown hit the housing market.

Sales plummeted and viewings halted when the sector was effectively frozen.

The Nationwide said the magnitude of the shock to the economy made a house price fall unsurprising.

It said the outlook for the housing market was "highly uncertain" in the coming months.

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2 hours ago, Demitri_C said:

Yeah its unknown what will happen. Alot of predictions are saying this year prices will fall but recovery expected next year.

I’d say take those with a grain of salt because prices are notoriously slow to bottom out. For example after the 2008 crash Ireland’s property prices kept falling bit by bit until 2013.

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1 hour ago, Enda said:

I’d say take those with a grain of salt because prices are notoriously slow to bottom out. For example after the 2008 crash Ireland’s property prices kept falling bit by bit until 2013.

I'm no expert on the housing market, but I think housing almost always lags a recession. 

Just going from the usual stuff that affects housing, i.e. unemployment, credit markets, bank sector etc. you might not have seen the full devestatation of it yet. In fact it's likely you haven't. 

I think there's loads of jobs, especially in the service and retail sector that won't have the solidity to start up again after this crisis. And I also believe there's a lot of companies that have ridden off the worst so far, but have at this point emptied their cash, spent their emergency loans and will be faced with cutting back on staff quite heavily come autumn. 

The people who have already lost their jobs or are in a job they might lose, might at this point be in the same position as the companies themselves, thus their savings have been spent trying to keep afloat, and now they are up shit creek. I bet that also covers a lot of heavily indebt people. 

Banks are given liqiuidity by the governments to keep lending going, but a lot of banks don't see the profit in doing so at this point. It's just poor risk reward from their part, so that's another discussion.

I dunno tbh, I'm very very negative to the equity market at this point, but housing will be interesting. Declining housing prices is pretty much a given, but you gotta wonder the consequences if 20-40 million US citizens start failing their monthly payments. A lot of them probably already are, but since it's a "secured asset" or whatever you term you use in English I assume they got a lot of flexibility in terms of passing up on payments. I don't know how the GB unemployment is mind, so I didn't go there. 

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6 minutes ago, KenjiOgiwara said:

Wonder how many blue chip companies we'll see fall. I can't see wirecard being the last one. 

Wirecard? I thought they went under due to dodgy financial practices.

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45 minutes ago, Demitri_C said:

Whats everyone's opinions on sunaks rumoured stamp duty holiday?

He just confirmed it. Good news for buyers.

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The chancellor announces a temporary holiday on stamp duty on the first £500,000 of all property sales in England and Northern Ireland, to run until 31 March next year. 

He says the change will take place immediately. 

The levy is paid on land or property sold for £125,000 or more – although first-time buyers pay no tax up to £300,000.

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Meals out Mon to Weds , upto £10 per person during August at selected restaurants  ,  Way to give something away without actually giving something away 

 

 

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“Rishi Sunak says the hospitality sector has been particularly badly hit.

He therefore promises to cut VAT on food, accommodation and attractions.

"VAT will be reduced, from next Wednesday until January 12th, from 20% to 5%," he says.”

 

 

BBC are reporting.

 

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1 minute ago, Stevo985 said:

Does a stamp duty holiday mean if you buy a house before March 31st you DON’T pay stamp duty. Or does it get deferred until later?

No stamp duty to be paid for all sales completed before March 31st. Different rules apply to the Scotch I believe. 

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33 minutes ago, Seat68 said:

No stamp duty to be paid for all sales completed before March 31st. Different rules apply to the Scotch I believe. 

Great. I wasn't sure if the "holiday" part referred to just not having to pay it until later. Like pausing it.

I should be buying before then so it's good news for me personally

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8 minutes ago, Stevo985 said:

Great. I wasn't sure if the "holiday" part referred to just not having to pay it until later. Like pausing it.

I should be buying before then so it's good news for me personally

Risk is greedy sellers increase their house price

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1 minute ago, Genie said:

Risk is greedy sellers increase their house price

Increasing their house price I guess doesn’t matter unless people are willing to pay it. 
 

The danger is probably more buyers having extra cash to put towards a house and will pay more. That’s certainly my situation. I was having to factor 10 grand of stamp duty into what I was paying towards a house. If I don’t have to pay that I can put some of it towards the deposit and pay a bit more for a house

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