Property crash, just maybe it really is different this time

[Axeman123]

36 minutes ago, Petatep said:

We very nearly moved to Elland many years ago, for a job opportunity. Glad we didnt.

I have family there, haven't visited them at home since the 90s though.

[Petatep]

20 minutes ago, Axeman123 said:

I have family there, haven't visited them at home since the 90s though.

Beautiful town, nearly tempted (this was late 80's) but we could hear M62 traffic every where we went.

[One percent]

1 hour ago, Petatep said:

Whitby's nice.

No it’s not. It’s shit. And they don’t welcome tourists.   

[JoeDavola]

Friend of a friend went recently to get financial advice regarding a mortgage and was told:

"Get your parents to remortgage their house and give you the money. Everybody's doing it."

[HousePriceMania]

2 minutes ago, JoeDavola said:

Friend of a friend went recently to get financial advice regarding a mortgage and was told:

"Get your parents to remortgage their house and give you the money. Everybody's doing it."

Im surprised the FCA hasn't realised that this is a ponzi scam.

P.S. Im not really surprised.

[JoeDavola]

Just now, HousePriceMania said:

Im surprised the FCA hasn't realised that this is a ponzi scam.

Every report I've heard of regarding financial/mortage advisors has been horrendous, they've always been pushing you to take on more and more debt. I have no doubt they're now trying to rope people's parents in - thing is if you need your parents to start paying a mortgage again so that you have a deposit so you can start paying a mortgage....isn't that kind of an inter-generational mortgage?

[Chewing Grass]

11 minutes ago, One percent said:

No it’s not. It’s shit. And they don’t welcome tourists.   

You forgot, the Seagulls shit on everything and peck the eyes out of small dogs.

[leonardratso]

8 minutes ago, Chewing Grass said:

You forgot, the Seagulls shit on everything and peck the eyes out of small dogs.

i once shot a gannet with both barrels.

Tough as old boots it was, had to go over and break its neck in the end.

Dog still ate it.

[HousePriceMania]

12 minutes ago, JoeDavola said:

Every report I've heard of regarding financial/mortage advisors has been horrendous, they've always been pushing you to take on more and more debt. I have no doubt they're now trying to rope people's parents in - thing is if you need your parents to start paying a mortgage again so that you have a deposit so you can start paying a mortgage....isn't that kind of an inter-generational mortgage?

Commission based debt pushers...the more debt you take the richer they get.

f**king parasites

[Van Lady]

I’m a bit vexed regarding my daughter and her fiancé.

They’re both lovely decent almost 30 years old, earning decent money and I’m extremely happy about their marriage next year but…..

She moved into his flat a couple of years ago in Dunfermline and they are very happy together and both savers and err towards frugality. Both of them have a lot of saved money.

It’s a lovely flat in a nice area but they both want a house. Modern flat though and I’m not keen on modern builds.

The flat went on the market last Thursday for offers around £135k and by the weekend 7 viewings were arranged. Already had 2 offers over asking. Further 5 viewings scheduled this week and a closing date set at 12 noon on Monday 26th (Scotland where offers are put in then they can accept or decline them).

Don’t know what mortgage is on the flat as I don’t interfere or pry because they’re a committed couple and it’s none of my business but it’s not much monthly payment in comparison to when daughter was sharing in Edinburgh. Went from her paying about £450pm renting to less than half of that.

They’re looking to buy a house in the £250k region (new build 🙁) and yes they can afford the much higher mortgage but I do wish they’d sit tight where they are for now. They’ve viewed a house and 10 other people have viewed and are interested according to estate agent.

🙁Oh well. I hope they’ll be ok but I think they maybe also be in a situation where there’s lots of interest and a closing date set with temptation to put in a higher offer to get the place. Dunfermline is ok, not somewhere I’d want to live but it seems hot there regarding competition for flats and houses.

Hope in the future that they don’t rue the day that they didn’t stay put in a very comfortable and decent situation regarding their home.

[Joxer]

1 hour ago, HousePriceMania said:

This tweet sums up all that is wrong in the UK.
 

Unproductive parasites demanding a bail out at any cost.

 

Who's to say they wont get it in the end.

 

I follow him on twitter. His tax research blog is getting increasingly insane as rates rise. I wonder if he has a big mortgage 

[sancho panza]

5 hours ago, Ina said:

In the last 8 weeks sentiment ie confidence in the market has changed massively.  In my niche sphere which is Probate sales I reckon it is because the doing up costs outweigh any potential profit.  The doing up and refurbishment costs have exploded.  My probate properties  used to receive offers above the asking price within days.  No more, that has gone.  People, whether doer uppers or developers are driving a very hard bargain. They are pulling out of unprofitable options all the time.

Ina,always appreciate your insights from the coal face.Probate sales are an important part of the margins where prices are set.

COuld you hazrad a rough guess as to how much lower the market is than say,last year at this time.I know you've said the amount of bids has dropped,but what sort of a drop in sale price is the result?

I realsie this isn't the main body of the market and no pressure if you'd rather not say but you're in quite a unique position.

Also how are beneficiaries adjsuting to the new normal?Are they accepting of drops or is there a lot of resistance?

24 minutes ago, Van Lady said:

I’m a bit vexed regarding my daughter and her fiancé.

They’re both lovely decent almost 30 years old, earning decent money and I’m extremely happy about their marriage next year but…..

She moved into his flat a couple of years ago in Dunfermline and they are very happy together and both savers and err towards frugality. Both of them have a lot of saved money.

It’s a lovely flat in a nice area but they both want a house. Modern flat though and I’m not keen on modern builds.

The flat went on the market last Thursday for offers around £135k and by the weekend 7 viewings were arranged. Already had 2 offers over asking. Further 5 viewings scheduled this week and a closing date set at 12 noon on Monday 26th (Scotland where offers are put in then they can accept or decline them).

Don’t know what mortgage is on the flat as I don’t interfere or pry because they’re a committed couple and it’s none of my business but it’s not much monthly payment in comparison to when daughter was sharing in Edinburgh. Went from her paying about £450pm renting to less than half of that.

They’re looking to buy a house in the £250k region (new build 🙁) and yes they can afford the much higher mortgage but I do wish they’d sit tight where they are for now. They’ve viewed a house and 10 other people have viewed and are interested according to estate agent.

🙁Oh well. I hope they’ll be ok but I think they maybe also be in a situation where there’s lots of interest and a closing date set with temptation to put in a higher offer to get the place. Dunfermline is ok, not somewhere I’d want to live but it seems hot there regarding competition for flats and houses.

Hope in the future that they don’t rue the day that they didn’t stay put in a very comfortable and decent situation regarding their home.

Just had a look at rentals there and they look very pricey.

Tough decisions for the young people t these prices.Big risks either way

[Stuey]

7 hours ago, leonardratso said:

it has nice bits and shit bits, i should know i come from there, trouble is its all becoming a shit bit.

I quite liked Farsley when I visited in spring. Perhaps a bit too close to Bradford's overspill though...

[Frank Hovis]

6 hours ago, Van Lady said:

I’m a bit vexed regarding my daughter and her fiancé.

They’re both lovely decent almost 30 years old, earning decent money and I’m extremely happy about their marriage next year but…..

She moved into his flat a couple of years ago in Dunfermline and they are very happy together and both savers and err towards frugality. Both of them have a lot of saved money.

It’s a lovely flat in a nice area but they both want a house. Modern flat though and I’m not keen on modern builds.

The flat went on the market last Thursday for offers around £135k and by the weekend 7 viewings were arranged. Already had 2 offers over asking. Further 5 viewings scheduled this week and a closing date set at 12 noon on Monday 26th (Scotland where offers are put in then they can accept or decline them).

Don’t know what mortgage is on the flat as I don’t interfere or pry because they’re a committed couple and it’s none of my business but it’s not much monthly payment in comparison to when daughter was sharing in Edinburgh. Went from her paying about £450pm renting to less than half of that.

They’re looking to buy a house in the £250k region (new build 🙁) and yes they can afford the much higher mortgage but I do wish they’d sit tight where they are for now. They’ve viewed a house and 10 other people have viewed and are interested according to estate agent.

🙁Oh well. I hope they’ll be ok but I think they maybe also be in a situation where there’s lots of interest and a closing date set with temptation to put in a higher offer to get the place. Dunfermline is ok, not somewhere I’d want to live but it seems hot there regarding competition for flats and houses.

Hope in the future that they don’t rue the day that they didn’t stay put in a very comfortable and decent situation regarding their home.

 

I share your concern about the quality of new builds but a house is so much more of a home than a flat can ever be.

Mortgage rates have already risen to more normal levels so any future rises will be proportionately lower.

And a £250k purchase for two frugal people on decent salaries with a substantial deposit from selling the flat will be very affordable.

Of course the house could fall in value but by how much is it likely to do so?

I confess that I couldn't place Dunfermline on a map but £250k doesn't sound like a bubble price to me.

To go back to something I've suggested before, all houses have a utility price based upon cost to buy somewhere basic in the vicinity with the same number of bedrooms, which will strongly correlate with rental yield, and then a premium above that for "nice to have": location, garden, drive, view, no party walls and so on.

On that basis I reckon my house value to be 40% utility and 60% premium. In a crash it could lose most of that premium so halve in value.

I would guess the house they're looking at is nearer 80% utility, 20% premium so the potential falls would be more limited.

[JoeDavola]

1 hour ago, Frank Hovis said:

 

I share your concern about the quality of new builds but a house is so much more of a home than a flat can ever be.

Mortgage rates have already risen to more normal levels so any future rises will be proportionately lower.

And a £250k purchase for two frugal people on decent salaries with a substantial deposit from selling the flat will be very affordable.

Of course the house could fall in value but by how much is it likely to do so?

I confess that I couldn't place Dunfermline on a map but £250k doesn't sound like a bubble price to me.

To go back to something I've suggested before, all houses have a utility price based upon cost to buy somewhere basic in the vicinity with the same number of bedrooms, which will strongly correlate with rental yield, and then a premium above that for "nice to have": location, garden, drive, view, no party walls and so on.

On that basis I reckon my house value to be 40% utility and 60% premium. In a crash it could lose most of that premium so halve in value.

I would guess the house they're looking at is nearer 80% utility, 20% premium so the potential falls would be more limited.

Yes I wince at 250K but that's as a single person. If a couple on decent salaries find a home they'd be happy with for the forseeable (i.e. could conceivably bring up a couple of children in should they want to) then £250K isn't too insane and they'll probably be fine.

[Frank Hovis]

2 minutes ago, JoeDavola said:

Yes I wince at 250K but that's as a single person. If a couple on decent salaries find a home they'd be happy with for the forseeable (i.e. could conceivably bring up a couple of children in should they want to) then £250K isn't too insane and they'll probably be fine.

 

Unindex it as I do with wages though.

RPI now is 372.8

RPI January 2000 was 166.6

That's 224% inflation in 23 years.

 

That £250k house is therefore the equivalent of a £112k house in Jan 2000 which doesn't sound bad to me.

https://www.ons.gov.uk/economy/inflationandpriceindices/timeseries/chaw/mm23

[JoeDavola]

6 minutes ago, Frank Hovis said:

That £250k house is therefore the equivalent of a £112k house in Jan 2000 which doesn't sound bad to me.

https://www.ons.gov.uk/economy/inflationandpriceindices/timeseries/chaw/mm23

Assuming it's well built I also wonder how the raw materials and labor costs might inflate over the next decade....i.e. would you have a hope in hell of building such a house for £250K. As good an inflation hedge as anything for a couple.

Went for a dander around the seaside villiage I've mentioned a few times here and stumbled across a plot for sale - the interesting this is this one actually has the foundations of the house already laid and nothing else - evidently someone planned a build, started it, went "fuck this is too expensive now" and is trying to sell it on to someone with deeper pockets.

Good luck with that.

Edited June 20, 2023 by JoeDavola

[JoeDavola]

Actually it's listed for sale at £220K, here's a photo:

[Dave Bloke]

17 hours ago, Austin Allegro said:

 

I wonder if any of them actually realise the full amount of the re-mortgage money plus interest has to be paid back at some point? Or do they think it's some sort of magical system to enable boomers to go on cruises and eat in garden centre cafes every day?

I think that is what she believes.

I checked. Say her house is valued at 1 million, they agree to 500k equity release. The lowest equity release interest rate today is 6.1%. So in 11 years that's 500K in interest payments. No more equity.

What I did discover is that normally you can't go into negative equity with an equity release mortgage, which is one thing. I guess it is really a kind of negative annuity.

However if the local council think you've set the whole thing up as a scam to avoid paying care home fees they can put a charge on any assets or on the assets of the people who've benefitted from the equity release.

The old biddy in question has a council index linked pension of 35K per year and considers herself "hard up".

[Dave Bloke]

11 hours ago, Chewing Grass said:

 the Seagulls shit on everything and peck the eyes out of small dogs.

is that a Beautiful South lyric?

[Dave Bloke]

2 hours ago, Frank Hovis said:

 

Unindex it as I do with wages though.

RPI now is 372.8

RPI January 2000 was 166.6

That's 224% inflation in 23 years.

 

That £250k house is therefore the equivalent of a £112k house in Jan 2000 which doesn't sound bad to me.

https://www.ons.gov.uk/economy/inflationandpriceindices/timeseries/chaw/mm23

if only my salary had gone up that much

[Dave Bloke]

2 hours ago, JoeDavola said:

Actually it's listed for sale at £220K, here's a photo:

I'm seeing quite a few houses advertised in France for not inconsiderable sums: say 500K for 60 m.sq near a major city where the energy rating is "G" and the estate agent suggests knocking the place down and starting again. These are on small plots so you'd only be able to build much the same kind of house !

[GTM]

On 02/06/2023 at 22:09, GTM said:

The property I rented until March this year is up for sale for £500K. I was paying £1650 a month. 

Reduced today to £475,000.

Don't all rush at once so that you too can obtain a yield of 4.17%. Before costs.

Or you could put half that amount into BATS to earn about the same amount of money and not have to lie awake at night worrying that you can't really afford to replace the boiler that just blew up.

[AWW]

Anyone have any concrete data on length of time taken to let a property? It seems to me like rentals that would have flown off the shelf last year (around me, terraces and semis around the £2.5k/mo mark) are starting to stick, with even some "reasonably priced" places being reduced.

[JoeDavola]

3 hours ago, Dave Bloke said:

I'm seeing quite a few houses advertised in France for not inconsiderable sums: say 500K for 60 m.sq near a major city where the energy rating is "G" and the estate agent suggests knocking the place down and starting again. These are on small plots so you'd only be able to build much the same kind of house !

That site, overlooking yes the coast but also a train track before the coast, has planning permission for a 1750 sqft house on it.

There's a 1900 sqft townhouse on sale in Belfast at the moment for £260K.

£220K + build your own house vs a bigger house already built at £260K....