Property crash, just maybe it really is different this time

[MrXxxx]

54 minutes ago, roundhouse said:

Seems same story here. Many more listed above my price band and not so many selling, but lower level fewer listed and still overpriced  but most go SSTC often before the month-later reduction.
I'm looking too... good luck AtL!

My plan was to do the same as both of you, but now I am going to 'hold off' for another 10-12 months...well I have waited about 10-12 years so one more isn't going to make that much difference, and I think in about 12 months we will be seeing some serious reductions/recessionary forces; maybe not the market bottom, but not far off [hopefully].

[wherebee]

18 minutes ago, Wight Flight said:

I believe it is still true.

I would like them to declare that any new build here for at least the next five years could only be sold to locals (the council define that as five year residency)

Homes would therefore have to be sold at a price to fit local wages, which would hopefully bring down the cost of land.

yeah, we have a similar rule in Australia, but for established dwellings.  And rules on a certain proportion of new builds must be sold to Aussies.

So what happens is that ethnic communities, who have higher levels of familial trust, buy in the name of one person who qualifies and the mortgage is paid by non-residents.  The non-residents can, sometimes, also double dip by becoming renters of the property they are secretly paying for and get the council to pay their rent...

[Joncrete Cungle]

9 hours ago, HousePriceMania said:

Ahhh, remember the off plan Spanish buyers...this is from Sept 2007...saying the heady days of off plan were gone but prices would climb 10% that year. We all know what came next, well worth a read, hindsight is a wonderful thing

 

https://www.eyeonspain.com/spain-magazine/property-outlook.aspx

 

 

While driving down from the hills to the coast today, we stopped for a quick look at some canaries off plan developments that never got finished after 2008. Still unfinished with squatters / new Spanish having taken up residence and put makeshift windows and doors on.

[With a crooked smile]

8 hours ago, Wight Flight said:

would like them to declare that any new build here for at least the next five years could only be sold to locals (the council define that as five year residency)

Homes would therefore have to be sold at a price to fit local wages, which would hopefully bring down the cost of land.

Local residency here is 3 years. Plus we have a few odd ones (must be working or have worked in agriculture before retirement or be the widow of someone who has). Only the shitty LO properties go cheap as there's been a big influx of remote workers. I've seen decent LO properties going for 700k around Borrowdale. They don't need to fit local wages they just need a few people with the capability to pay thr price.

[Axeman123]

Headline: UK house prices being cut by £14k to make a sale

"High mortgage rates have forced one in 10 home sellers to cut just over £14,000 off their asking prices as demand slumps. The average property price in the UK is now £260,800, property website Zoopla said, which means sellers are taking a cut of £14,100 or a 4.5% discount. It is the highest gap between the asking price and sale price for five years, according to Zoopla, and follows several months of falling house prices...Richard Donnell, executive director at Zoopla, said: 'Greater realism on the part of sellers is supporting housing market activity in the face of higher borrowing costs. Many homeowners are sitting on sizeable house price gains made over recent years and have more room to be flexible accepting offers below the asking price. Discounts to asking price have widened and while 4% to 5% discounts are manageable, if these were to widen further then this would point to a greater likelihood of larger house price falls. We believe the market remains on track for a soft landing in 2023, with modest price falls of up to 5% and one million housing sales.' The average estate agent office has 24 homes for sale compared with 15 a year ago, creating more choice for home buyers who have more room to negotiate on price..."

Nothing particularly new, but nice to see it in mainstream sources.

https://uk.finance.yahoo.com/news/uk-house-prices-being-cut-by-£14k-to-make-a-sale-080419513.html

[HousePriceMania]

Buy To Let anyone ?
 

 

[Axeman123]

BTLegraph continues going rogue:

Headline: House prices will have to fall 20pc this year to avoid mortgage crisis

"House prices would have to fall by more than a fifth to restore mortgage affordability to last year's level, in a sign the property slump may be worse than predicted, experts have warned. The average five-year fixed rate mortgage has jumped from 2.35pc to 4.6pc for homeowners with a 25pc deposit, Bank of England figures show. Repayments have risen from an average of £985 to £1,254 in the past year, according to Hamptons estate agents, putting a massive strain on household incomes. The average house price now stands at £297,770 and experts are forecasting a double-digit plunge in values this year..."

https://uk.finance.yahoo.com/news/house-prices-fall-20pc-avoid-123852550.html

My favourite part is the use of the word "will" in the headline, rather than the more passive "could".

[eek]

15 minutes ago, Axeman123 said:

BTLegraph continues going rogue:

Headline: House prices will have to fall 20pc this year to avoid mortgage crisis

"House prices would have to fall by more than a fifth to restore mortgage affordability to last year's level, in a sign the property slump may be worse than predicted, experts have warned. The average five-year fixed rate mortgage has jumped from 2.35pc to 4.6pc for homeowners with a 25pc deposit, Bank of England figures show. Repayments have risen from an average of £985 to £1,254 in the past year, according to Hamptons estate agents, putting a massive strain on household incomes. The average house price now stands at £297,770 and experts are forecasting a double-digit plunge in values this year..."

https://uk.finance.yahoo.com/news/house-prices-fall-20pc-avoid-123852550.html

My favourite part is the use of the word "will" in the headline, rather than the more passive "could".

As my daughter pointed out last week - if she can't afford to buy at these prices that means that no-one can afford to buy at these prices.

So all she can do is keep on saving and waiting for sanity to return to the market which will take time (alt least a year and probably 2 to 3 years before the lows are hit)..

Edited February 28, 2023 by eek

[Axeman123]

4 minutes ago, eek said:

So all she can do is keep on saving and waiting for sanity to return to the market which will take time (alt least a year and probably 2 to 3 years before the lows are hit)..

Maybe, certainly precedent is in accordance with that.

OTOH though, the sheer speculative beleif in property can't dissipate slowly IMO it has to implode and turn to fear/disgust. Oz and Nz obviously have their own individual national circumstances, but they appear to be a few months ahead of us and in their hot markets AIUI are down by a lot and faster than anything prior. We could be seeing the start of a stock-market style panic unlike anything previously. Maybe we see a really big legdown this year, and then a continous slow grind lower over a couple more. The slow grind element could be less capital loss than renting in that scenario.

I could be talking bollocks though, obviously. Fingers crossed for your daughter though (and the rest of us)

[JoeDavola]

On 22/02/2023 at 13:57, JoeDavola said:

That is precisely what happened last year:

1. Bidding war up to £280K.

2. Winning bidder a week or two later admitted the mortgage company wouldn't lend him £280K (even at the lower IR's that were in place back then).

3. Bid dropped down to £270K i.e. the second highest bidder (Mum complaining that she'd been "robbed of £10K", no she fucking hadn't), and sat there for months as interest rates rose and rose and my parents couldn't find anything spectacular enough.

4. £270K bidder said he couldn't afford that at the higher IR's now and dropped his offer to £250K.

5. Parents were disgusted as they're not giving it away, house taken off market.

The house is going back on over the next month or so - the EA has told them to put it on not at what it was listed for a year and a bit ago when IR's were low, but to list it at the value of the highest bid that it got (that fell through) when interest rates were a fraction of what they are now, because apparently there's no evidence that prices are falling.

So it would appear the ever soaring asking prices are being driven by EA's not the people who own the houses.

[Joncrete Cungle]

Bloody hell Joe it's more of a saga than War and Peace!

[JoeDavola]

10 minutes ago, Joncrete Cungle said:

Bloody hell Joe it's more of a saga than War and Peace!

Interesting to see how things are working from the inside.

"Lets take the top offer you had last year that wasn't even a valid offer and use that as the starting price now" seems insane, but I have learned the housing market follows no logic and heck they could end up selling it for even more again this year.

[Stuey]

15 minutes ago, JoeDavola said:

 

"Lets take the top offer you had last year that wasn't even a valid offer and use that as the starting price now" seems insane, but I have learned the housing market follows no logic and heck they could end up selling it for even more again this year.

I think it will. 

Trust estate agents, they are the experts who know the market. 

[JoeDavola]

35 minutes ago, Stuey said:

Trust estate agents

Joking aside, it would indicate the follwing:

1. The estate agents aren't in the least bit bothered about the house not selling quickly - house sales must not make up the majority of their income it must be rentals.

2. If the house does sell for more than it did last year then house prices are completely divorced from traditional measures of affordablity now i.e. earnings and cost of borrowing. Which they could well be thanks to the Bank of Boomer and lack of supply.

Either way I'll report back with what happens over the coming months.

Edited February 28, 2023 by JoeDavola

[mh9000]

1 hour ago, JoeDavola said:

The house is going back on over the next month or so - the EA has told them to put it on not at what it was listed for a year and a bit ago when IR's were low, but to list it at the value of the highest bid that it got (that fell through) when interest rates were a fraction of what they are now, because apparently there's no evidence that prices are falling.

So it would appear the ever soaring asking prices are being driven by EA's not the people who own the houses.

From the EA’s perspective they probably know that if they don’t tell them it’s worth this amount (i.e. what they want to hear) they’ll go to another agent who will…but then whether it does sell will be the real litmus test as you say

[Axeman123]

1 hour ago, JoeDavola said:

"Lets take the top offer you had last year that wasn't even a valid offer and use that as the starting price now"

A year earlier that sentence would have included the additional words "an extra 20% on top". Its a kind of progress.

[JoeDavola]

8 minutes ago, mh9000 said:

From the EA’s perspective they probably know that if they don’t tell them it’s worth this amount (i.e. what they want to hear) they’ll go to another agent who will…but then whether it does sell will be the real litmus test as you say

Yeah I hadn't thought of it like that.

It's fascinating to watch a market basically cripple itself like this, i.e. make it difficult for any transactions to complete...with everyone admitting that prices are nuts but feeling they need to list theirs high because everyone else is doing that and they can't afford to move otherwise.

Of course, at you move down the chain you'd think there will have to be a series of chumps that will have to earn the money to pay for all these increases and pay 6% interest on the obscenely sized loans to do , but that's out of sight out of mind of those in the equity swapping game.

Edited February 28, 2023 by JoeDavola

[Google247]

2 hours ago, eek said:

As my daughter pointed out last week - if she can't afford to buy at these prices that means that no-one can afford to buy at these prices.

So all she can do is keep on saving and waiting for sanity to return to the market which will take time (alt least a year and probably 2 to 3 years before the lows are hit)..

Only if your daughter is the richest person buying in that area... or she will find as many have that there is always someone with a bit more money who can and will pay a bit more

[Wight Flight]

43 minutes ago, Google247 said:

Only if your daughter is the richest person buying in that area... or she will find as many have that there is always someone with a bit more money who can and will pay a bit more

Or more generous parents 

@eek

[Errol]

 

[Ash4781b]

https://www.reuters.com/business/aerospace-defense/uk-building-supplier-travis-perkins-warns-challenging-2023-2023-02-28/
 

“Travis Perkins expects inflation for the building goods it sells to moderate to about 5-8% this year, compared to a rise of about 15% last year.

Williams said bricks had been one of the worst affected products, with their prices rising 50% over the last 18 months, while plasterboard had risen 30%.”

 

Piles of bricks going up in price. Rest of that article points to construction sector weakness. I can’t see those house building targets being hit. Back to the land banking ?

[MrXxxx]

6 hours ago, JoeDavola said:

The house is going back on over the next month or so - the EA has told them to put it on not at what it was listed for a year and a bit ago when IR's were low, but to list it at the value of the highest bid that it got (that fell through) when interest rates were a fraction of what they are now, because apparently there's no evidence that prices are falling.

So it would appear the ever soaring asking prices are being driven by EA's not the people who own the houses.

The problem is they 'got' £280k [or was it £270k?!], and so accepting anything else will feel like "Giving it away"...this is how property prices get into peoples psyche, and they forget something is only worth what someone is prepared to GIVE you at THAT particular TIME.

[MrXxxx]

5 hours ago, JoeDavola said:

1. The estate agents aren't in the least bit bothered about the house not selling quickly - house sales must not make up the majority of their income it must be rentals.

Or is sits there and doesn't sell...they can then show it to other sellers on their books with similar properties as and example, and a justification for them to drop their prices?

[Democorruptcy]

UK competition regulator to probe housebuilding market

Quote

 

Year-long study will focus on property quality, land management and local authority oversight

The UK competition watchdog has launched a market study of the housebuilding sector on the back of “widespread concerns about housing availability and costs”.

The Competition and Markets Authority on Tuesday said it would look at whether builders were “delivering the homes people need at sufficient scale or speed”. Its year-long study will focus on housing quality, land management, local authority oversight and innovation.

The regulator said that although its work would not “unlock a housebuilding boom”, it could lead to policy recommendations or enforcement action against companies.

https://www.ft.com/content/a915d643-67c2-439d-a498-dcdd619298ce

 

 

[XswampyX]

53 minutes ago, Democorruptcy said:

Year-long study will focus on property quality, land management and local authority oversight

I can hear it now.

"Yep. New houses are shit, so we recommend putting their price up by £100,000 and taking a kidney off every 1st time buyer."

"This will allow people who bought the shit houses in the past to put their newly acquired equity into some twigs in vases, paint everything magnolia and put a conservatory on it."

"We also recommend a further 3 years of investigation into this matter, by us, at your expense."

"Thanks!"