Property crash, just maybe it really is different this time

[sancho panza]

https://uk.finance.yahoo.com/news/properties-suffer-down-valuations-banks-132421363.html

Properties suffer ‘down valuations’ as banks fear house price falls

 

 

 

Melissa Lawford

Tue, 23 August 2022, 2:24 pm

Banks and surveyors are “down valuing” as many as half of homes in some parts of the country amid fears sharp house price falls are on the horizon.

Home buyers have been left scrambling for cash as lenders have refused to grant mortgages big enough to cover the agreed sales price. Experts said banks were concerned the cost of living crisis would cause the end of the post-pandemic property boom.

Anthony Harris, of Continuum, a financial advice firm which manages over £1.53bn in mortgages and other assets, said: “I am seeing more than 50pc of purchase applications being down valued at present.”

 

This level is likely to rise further, he added. "Sellers are asking high prices and there always seems to be more than two buyers who are prepared to enter a bit of a bidding war, pushing up prices further. But the lenders’ surveyors are not supporting the prices agreed."

When surveyors do not agree with the buyer and seller’s valuation of the property, the home is down valued. The prospective buyer must then pay the difference between the valuation and the agreed sales price in cash, or risk the purchase collapsing.

Mr Harris said a couple buying their first home in Berkshire had to find an extra £30,000 in cash. They had agreed to pay £430,000 for their property but their lender valued the home at £400,000. Another family buying a house in West Sussex agreed to pay £470,000 but had to find a further £20,000 after their high street lender down valued the property to £450,000.

Adrian Anderson, of Anderson Harris mortgage brokers, said: "I expect mortgage valuers will start to be more conservative moving forwards. The heat is coming out of the market and buyers are being a bit more restrained because of rising mortgage interest rates and the cost of living crisis.”

Edited August 24, 2022 by sancho panza

[sancho panza]

https://uk.finance.yahoo.com/news/sluggish-property-market-sees-landlords-060000627.html

Landlords struggling to exit the market are pushing down rents

 

 

 

Melissa Lawford

Wed, 24 August 2022, 7:00 am

 

London landlords could soon be unable to charge higher rents as the capital’s chronic shortage of homes starts to ease.

The increase in the number of homes came after rising rents and a sluggish sales market tempted landlords back into the space. The number of available lets in central London has jumped by 60pc since the start of the year is 24pc higher than what was available before the pandemic, according to data from Chestertons estate agents.

It is still 40pc down compared with August 2021, however, and competition for tenancies remains fierce, but experts said the supply crunch was ending. Katinka Hill, of Chestertons, said: “The London market is turning. There are definitely more homes being advertised and rents will level out by the end of this year.

 

“Accidental landlords are putting their properties up for rental instead of selling. Also, the rising cost of living has convinced couples who each own a property to move in together and let out the other one for extra income.”

Greg Tsuman, of Martyn Gerrard estate agents, said that the number of listings from his office tripled in six weeks, although the rush has since slowed. He added: “What happens in central London is an advance warning for the rest of London.”

London landlords were hit hard during the pandemic, when the shift to working from home and online university courses triggered an exodus from the city centre. Investors who relied on tourists and marketed properties as holiday lets also turned to the long-term lettings market after travel bans destroyed their income, increasing competition among landlords. Many suffered long void periods or were forced to slash rents by 30pc to attract tenants.

Edited August 24, 2022 by sancho panza

[HousePriceMania]

The downward tend is locked in now.

 

 

[HousePriceMania]

 

[Ina]

Don’t dox me.  I overheard our new build team yesterday stating developers have got beyond greedy.  When they are stating the obvious then the crash is coming.   The head of new build genuinely cannot understand why anyone would ever buy off plan.  He likes to see a road lay out etc.

[onlyme]

3 hours ago, HousePriceMania said:

The downward tend is locked in now.

 

 

I'm about to piss on your chips, one of my barometer houses has caught an offer!  Thing is i thought and seller led to believe same, buyers looking to lock in cheap fix, there will be a few still going through on that basis. Next batch of mortgage approvals whole different ball game. To say the seller is relieved and crossing everything is an understatement.

 

[JohnnyB]

Being dicked around a bit by the seller regarding final contracts exchange and completion. Don't think it's anything nefarious, just pure laziness and incompetence. Stuff that should have been sorted months ago, no chain.

Thing is though, since the mortgage agreed the rates have gone up big time, and likely 0.5 every month moving forwards. If they had to start again the blunt maths mean the same buyer as before would only be able to offer £10k or more less. If I was in their position I would be doing everything I could to get it over the line asap.

I think the truth is that the average Brit has no clue about this stuff, so it's going to take a while to filter through but when it does it will hit hard.

[HousePriceMania]

12 hours ago, onlyme said:

I'm about to piss on your chips, one of my barometer houses has caught an offer!  Thing is i thought and seller led to believe same, buyers looking to lock in cheap fix, there will be a few still going through on that basis. Next batch of mortgage approvals whole different ball game. To say the seller is relieved and crossing everything is an understatement.

 

Piss away. 

I'm not sure how 1 transaction is more relevant that the data collected from 300,000 listings though.

As you say, this has only just started and its the data going forward that'll be interesting.

[Boon]

Is it possible to break down property numbers or property type per postcode? Only the first bit and number, ie BT5

Obviously each postcode will be of different size but with populations known you could calculate listings/people

Firmly believe that some places will be worse hit than others and competition will be the main factor - after all if you need to sell quick the only real way to do that is to underprice everyone else.

So finding those postcodes with high number of listings relative to population could give an idea of where seller power will be weak.

[Kurt Barlow]

Mrs B is trying to persuade me to buy a house in Adelaide. She has a unit there. The view is to rent it out and then go and retire there in about 12-14 years time. 

She has some dosh from Iran plus owns her unit so we can put down a 40% deposit on a 3 bedder in South Adelaide near the coast. 

Rent will cover mortgage , council tax, fees, repairs with a bit left over (for extra mortgage repayments) 

Given where the UK appears to be going this options looks quite attractive. 

[wherebee]

1 hour ago, Kurt Barlow said:

Mrs B is trying to persuade me to buy a house in Adelaide. She has a unit there. The view is to rent it out and then go and retire there in about 12-14 years time. 

She has some dosh from Iran plus owns her unit so we can put down a 40% deposit on a 3 bedder in South Adelaide near the coast. 

Rent will cover mortgage , council tax, fees, repairs with a bit left over (for extra mortgage repayments) 

Given where the UK appears to be going this options looks quite attractive. 

Ah, Adelaide.  Serial killer capital of the world.

Remember to check under the bed when you move in.

[HousePriceMania]

Posting this here for posterity...will call back in a couple of months if I remember

 

 

[Kurt Barlow]

9 minutes ago, wherebee said:

Ah, Adelaide.  Serial killer capital of the world.

Remember to check under the bed when you move in.

Nice view though to live out my retirement. 

 

[AWW]

37 minutes ago, Kurt Barlow said:

Nice view though to live out my retirement. 

 

And you can fit plenty of corks on that hat.

[Kurt Barlow]

24 minutes ago, AWW said:

And you can fit plenty of corks on that hat.

I wonder if I'll be sitting there in 15 years time sipping a glass of piss (Aussie beer) watching the sun go down with Walther (Milfy) mocking me that my children will be working for him / end of Oz / UK etc etc etc 

Laughing.....

 

Edited August 25, 2022 by Kurt Barlow

[spygirl]

18 hours ago, Ina said:

Don’t dox me.  I overheard our new build team yesterday stating developers have got beyond greedy.  When they are stating the obvious then the crash is coming.   The head of new build genuinely cannot understand why anyone would ever buy off plan.  He likes to see a road lay out etc.

Fuck the road layout.

I'd like to see it all finished, council adopted and the rubble took away.

And probably a good 12 months to make sure the foundations are good n settled.

I'm ok with an expensive new built house.

It's just that new builds are expensive and badly built.

 

[spygirl]

Markets bet UK interest rates will hit 4% by May

Inflation-fuelled expectations in financial markets will raise cost of corporate borrowing and fixed-rate mortgage deals

https://www.ft.com/content/d5a5031e-1a55-45ac-8569-eef807f528b8

This is where it gets fun.

With a 3.5% spread over BoE base, resi SVRs are going to 7.5%, far above the 6% used for stress testing.

IO btl s rs are going to be touching 10% - or higher.

 

[sancho panza]

From London Central Portfolio.

Interesting House prices still below 2015 peak

London Central Portfolio (LCP), release their latest Prime Central London (PCL) Market Review.

PCL

• An effective 'second' discount, at around 12%, is available to US dollar denominated buyers based on exchange rate movements since January 2021
• Flats and houses in Mayfair and Marylebone offer the greatest discounts from the 2015 peak

Houses

• Values in PCL stand at a modest 1.7% below the 2015 peak at £3,871,112
• Strongest PCL house price growth within Pimlico at 6.6% over the last 12 months
• Supply and demand imbalance resulting in 5% price growth over the last 12 months
• Softening of monthly volume of sales by 4.3%

Flats

• PCL values standing 9% below the 2015 peak at £1,155,103
• Volume of sales steadily decreasing since Stamp Duty holiday
• Bayswater and Pimlico show relative good value with prices averaging around £863,000 and £712,000 respectively

[sancho panza]

18 hours ago, Ina said:

Don’t dox me.  I overheard our new build team yesterday stating developers have got beyond greedy.  When they are stating the obvious then the crash is coming.   The head of new build genuinely cannot understand why anyone would ever buy off plan.  He likes to see a road lay out etc.

Fascianting post.

It's alwasy good to find out what the insiders are thinking.

Don't let some of the more vocal put you off psoting again.really welcome your input.

[sancho panza]

10 minutes ago, spygirl said:

Fuck the road layout.

I'd like to see it all finished, council adopted and the rubble took away.

And probably a good 12 months to make sure the foundations are good n settled.

I'm ok with an expensive new built house.

It's just that new builds are expensive and badly built.

 

I remember the early 90's blow out when a family friend lived on a building site for 7 or 8 years withe only 30% of the flats completed.In Derby.It was a grim time.

Couldn't agree more with the insiders.

[No One]

On 17/08/2022 at 16:30, No One said:

298->293 (-5) *listed

Is it possible houses are being taken off to be put on again as a new listing on Rightmove? Why would EAs do this? Rightmove fee's?

 

293->301 (+8) in last 8 days

[No One]

1 hour ago, spygirl said:

Markets bet UK interest rates will hit 4% by May

Inflation-fuelled expectations in financial markets will raise cost of corporate borrowing and fixed-rate mortgage deals

https://www.ft.com/content/d5a5031e-1a55-45ac-8569-eef807f528b8

This is where it gets fun.

With a 3.5% spread over BoE base, resi SVRs are going to 7.5%, far above the 6% used for stress testing.

IO btl s rs are going to be touching 10% - or higher.

 

I've been reading this headline in a few places. If the boe was a serious instutition, IR would have been at 4% 6 months ago never mind next year with Inflation at 18.9%.

Currency crisis is going to have to force them like in black Wednesday and they will be kicking and screaming before they torpedo the housing market

[HousePriceMania]

6 minutes ago, No One said:

293->301 (+8) in last 8 days

Average Listing uptick was around 420 per day for the first 2 weeks, that's accelerated to 470 per day in the last week.

The stuff I am seeing coming on locally is total desperate kit flying stuff that I can see anyone touching.

Meanwhile, a friend of a friend is in dire straights and had found a buyer.

The house they were downsizing too pulled out, so they found a new more expensive one.  They realised they'd still be screwed if they bought that one so they pulled out.  Their buyer then pulled out.  Now they've dropped their price 15% from IAP from Jan. 

Given the backdrop of what is going on I can see them having to:

a) drop the price again to get ahead of the curve, or

b) lose everything within 6 months.

It's painful to watch but this is where Nu Labout and the tories have brought us.

5 minutes ago, No One said:

I've been reading this headline in a few places. If the boe was a serious instutition, IR would have been at 4% 6 months ago never mind next year with Inflation at 18.9%.

Currency crisis is going to have to force them like in black Wednesday and they will be kicking and screaming before they torpedo the housing market

It's a joke.  IRs to 4% Inflation to 20.

These people are literally robbing us all.

Lets see what Sunak does when he becomes PM with a late flurry in the polls and a close vote....

[onlyme]

8 hours ago, HousePriceMania said:

Piss away. 

I'm not sure how 1 transaction is more relevant that the data collected from 300,000 listings though.

As you say, this has only just started and its the data going forward that'll be interesting.

Largely tongue in cheek, about as positive as it gets as no sale on the properties I knew about was a big red flag as should have sold. Whatever transactions that are occurring know might be seen as the mopping up of the latent just buy this year and deal lockers. The final sweep before the lunge down.

[Bus Stop Boxer]

2 hours ago, sancho panza said:

Fascianting post.

It's alwasy good to find out what the insiders are thinking.

Don't let some of the more vocal put you off psoting again.really welcome your input.

I always take note of @Ina s posts.