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Property crash, just maybe it really is different this time


haroldshand

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My suspicion is that there are not enough good jobs. Anecdotally it feels there are quite a lot of vacancies out there but the majority are not sufficient to buy a property, only rent.

If there were loads of high paid easy jobs then, IMO we wouldn't have the situation in London where prices have plateaued for so long.

Doesn't mean that a particular field could be thriving, that has always been the case.

Does seem interesting that recently listings seem to have picked up again (albeit from very low figures). Coming into the first half of next year there will be energy price increases and maybe another interest rate rise.

Many of these properties may simply the ones that have not sold this year but it may be that adding to this will be people squeezed out, but also profit takers, as anyone buying in London pre HTB will have good gains.

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49 minutes ago, Boon said:

My suspicion is that there are not enough good jobs. Anecdotally it feels there are quite a lot of vacancies out there but the majority are not sufficient to buy a property, only rent.

If there were loads of high paid easy jobs then, IMO we wouldn't have the situation in London where prices have plateaued for so long.

Doesn't mean that a particular field could be thriving, that has always been the case.

Does seem interesting that recently listings seem to have picked up again (albeit from very low figures). Coming into the first half of next year there will be energy price increases and maybe another interest rate rise.

Many of these properties may simply the ones that have not sold this year but it may be that adding to this will be people squeezed out, but also profit takers, as anyone buying in London pre HTB will have good gains.

AS far as  I can work out - HTB firehousing aside- majority of London has been falling ~ 5 years.

Not that anyone MSM or selling EAs mention it.

Pryor is a buying agent - and relative honest and open about the market.

Thisis a arare.

With the number of sales per EA office bouncign along multi decades (record?) lows, I wonder how long the current EA model has left.

There isnt enough money to keep the lights on.

Most smalls EAs now seem to be a non paid owenr/operator and a handful of  PT UC wimmin

Fucknows how the chains still do - some gomrless PE funding Id guess.

countrywide-shares-2019-graph.jpg

 

chart.jsproto_large.chart?ID_SEDOL=BCKFY

 

 

 

In simple terms - if HPI was raging and houses flying off the market then these would not be flatlining.

 

 

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3 hours ago, Boon said:

My suspicion is that there are not enough good jobs. Anecdotally it feels there are quite a lot of vacancies out there but the majority are not sufficient to buy a property, only rent.

If there were loads of high paid easy jobs then, IMO we wouldn't have the situation in London where prices have plateaued for so long.

Doesn't mean that a particular field could be thriving, that has always been the case.

Does seem interesting that recently listings seem to have picked up again (albeit from very low figures). Coming into the first half of next year there will be energy price increases and maybe another interest rate rise.

Many of these properties may simply the ones that have not sold this year but it may be that adding to this will be people squeezed out, but also profit takers, as anyone buying in London pre HTB will have good gains.

The skills require to afford to live in London are basically top 5%.

The London average wage is only 2k more than UK national.

Population if London us niw majority non British. Which would be fine, if they were all rich. They are not. Skillless, spotless 3rd world scum.

You cannot sustain jobs in London when it's expensive to travel to, v expensive to live in and populated by 3rd world doley scum.

 

 

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2 hours ago, spygirl said:

AS far as  I can work out - HTB firehousing aside- majority of London has been falling ~ 5 years.

Not that anyone MSM or selling EAs mention it.

Pryor is a buying agent - and relative honest and open about the market.

Thisis a arare.

With the number of sales per EA office bouncign along multi decades (record?) lows, I wonder how long the current EA model has left.

There isnt enough money to keep the lights on.

Most smalls EAs now seem to be a non paid owenr/operator and a handful of  PT UC wimmin

Fucknows how the chains still do - some gomrless PE funding Id guess.

countrywide-shares-2019-graph.jpg

 

chart.jsproto_large.chart?ID_SEDOL=BCKFY

 

 

 

In simple terms - if HPI was raging and houses flying off the market then these would not be flatlining.

 

 

Last chart is Fixtons.

It's possible that the chart shows that what limited sales in London gave mainly been idiots piling into HTB new build.

It's possible that average houses in London will show no increase for 10 years, and London boom has just been on very low transactions and HTB distortions.

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  • 1 month later...
On 18/02/2022 at 19:48, spygirl said:

Ftb top tip - Make sure theyve not used porridge instead of mortar.

Also don’t grow weed in your loft if it’s a new build. 

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On 18/02/2022 at 14:44, HousePriceMania said:

You can't lose on property....

 

image.png.5bfd7c8c38d8b700410d54b13f02b87c.png

 

On 18/02/2022 at 14:46, HousePriceMania said:

if it's morale you want, I'm your man

image.png.5f0ff4fb66f2c9f6f100933bb870d7bf.png

 

All signs of mortgages no longer being a mass market market.

And the BoE exiting providing the majority of mortgage capital.

The market is now 20% down and max ~3.5 income lending.

The mortgage numbers and the lack of cash sloshing around hosing - EAs, bank profits etc point to that.

 

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1 hour ago, spygirl said:

 

 

All signs of mortgages no longer being a mass market market.

And the BoE exiting providing the majority of mortgage capital.

The market is now 20% down and max ~3.5 income lending.

The mortgage numbers and the lack of cash sloshing around hosing - EAs, bank profits etc point to that.

 

Little bit of background is I have developed property for 30 years or so and am slowly selling those that were held as tenants move out. That was always the exit plan. But I still keep really close to the local market with many contacts. 

I think people who are bulls (not you or many on these threads obs.) mistake demand and desire for housing for the actual whole market.

There is always demand, in the 80’s I would have given my left kidney when buying my first house and when we moved in 92 I borrowed over 5x with almost no consideration for what might happen and that was during an unprecedented sentiment slump.

I know there is more to it but for many it’s just a question of ‘what can I borrow’….I think the ridiculous HTB scheme highlights that. Who borrows on those terms to pay for an awful newbuild when a nice 1950’s semi with bigger garden and bigger rooms is 30% cheaper.

Once this market subsides then I think we will see a significant readjustment in prices. Like shares it won’t be universal but dependant on the house types, the street and the geography. I have seen some truly appalling purchases made over the last 18 months and to be fair I have seen some fairly decent buys.

The numerous props have been terrible and all under the guise of helping the young to buy….when we know it was to continue to inflate this ridiculous situation where a person in full time average job can’t buy a decent average home. 

The key will be at a higher level the headlines will hopefully show a softening market. Once the daft urgency to buy ‘anything’ subsides then people can breath and negotiate a half decent price. 

 

Edited by Pip321
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I suspect you know already who borrows on the HTB terms. 

Here, a HTB flat was more expensive than the equivalent house. Not forgetting that the flat comes with increasing service charges and the house does not. Even with houses becoming more popular vis a vis flats due to outside space the flats are still more expensive due to developers doggedly trying to hang on to the price. Eventually they may have to be cut soon though because the resale markets are showing quite a lot of weakness.

Why not buy the house? The house price was not affordable on a standard mortgage. This, as well as the 'get on the property ladder while you can' attitude provides a steady stream of customers for HTB.

There is virtually zero education for prospective buyers that they could be making daft, terrible purchases. That's because most of the people who are able to give them that education have vested interests in some way.

Some of the new build purchases I have seen, will be truly ruinous if the market declines any further, which seems inevitable unless prospective rate rises are cancelled. In many cases I have seen people postpone reality by simply renting their flat out 'waiting for the market to recover'.

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With a crooked smile
23 minutes ago, Boon said:

In many cases I have seen people postpone reality by simply renting their flat out 'waiting for the market to recover'.

This, 7.5k rent a room allowance (tax free) and a huge amount of pent up demand is why there will never be significant falls. There might be times when there are dips but if you take the old addage from the the stock market 'losses aren't realised unless you sell' and hold over a 10 - 15 year period almost everyone does alright (unless they've bought somewhere utterly shit and even there potential  rental gains over 10-15 years seem to mean quids in. 

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4 minutes ago, With a crooked smile said:

This, 7.5k rent a room allowance (tax free) and a huge amount of pent up demand is why there will never be significant falls. There might be times when there are dips but if you take the old addage from the the stock market 'losses aren't realised unless you sell' and hold over a 10 - 15 year period almost everyone does alright (unless they've bought somewhere utterly shit and even there potential  rental gains over 10-15 years seem to mean quids in. 

You are right. But housing sentiment when it goes is a long long process and whilst people may not formally drop prices and everyone kids themselves prices haven’t fallen….only those who do accept lower offers can sell.  

I had no mortgage by 30 and more than enough to retire at 40 just in the back of finding (indeed just casually coming across those) people who needed to sell. They are always out there and even a difficult ‘season’ can be enough to get 30/40% off comparables. 

Death, divorce and debt push people into corners. An empty house costs money and renting out grandmas old home that she had for decades emotionally isn’t often an option  

Not disagreeing with you but perhaps highlighting that shares carry a lot less baggage and although easier to sell are less likely to place someone in a position where they become truly desperate to sell like they might with a house….if that makes sense. 

To be fair 60% of my purchases will have been from ill informed ‘investors’, so again you are right in that those who are living in a home (and something that is decent and adaptable enough) can just carry in and postpone a move.

My son bought last year and with some help from us we steered him into something that good enough to stay in for life (and in this lovely road most people do). So whilst a modest 1960’s 3 bed semi, it’s a great family home and if it drops in value it won’t really matter unless of some unexpected  reason he needs to sell.

He was lucky because of my contacts but I have seen some pile into some really on overpriced places. Like the 90’s when there was large scale negative equity it was really mostly those who has jumped into an over hyped 80’s market and overpaid believing that prices ‘would catch up anyway’. 

Of course the government may just keep printing trillions of pounds, invent more props and let the whole thing continue….so everyone feels wealthy but has no money to eat or heat 🤦🏻‍♂️

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@Pip321

You did well to find somewhere at the minute without paying a ridiculous price. I'm mid 30s FTBer, and was going to buy with my mrs but split up. Now taking the same approach as your son looking for somewhere I wouldn't have to move again so if it drops who cares. Where I'm looking there's so little coming up for sale, anything remotely decent just gets 20+ viewings first day and is sold within a week for 5-10% over the listing. It will end eventually but is that 12 months or 12 years? 

Are you looking in the north or south? I'm in the north so maybe I should be grateful it's not as bad as the SE, there isn't as far for them to fall.

Edited by mh9000
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With a crooked smile
54 minutes ago, Pip321 said:

I had no mortgage by 30 and more than enough to retire at 40 just in the back of finding (indeed just casually coming across those) people who needed to sell. They are always out there and even a difficult ‘season’ can be enough to get 30/40% off comparables. 

Death, divorce and debt push people into corners. An empty house costs money and renting out grandmas old home that she had for decades emotionally isn’t often an option

This is all true, and fucking well done being mortgage clear at 30! I had 500kish in the bank last year having sold up but have since re purchased. Obvs guess I could bought outright but we've split it over our main residence and some commercial property so on paper still have fairly large mortgages. 

I'm 45, I'm well impressed by what you achieved at 30.

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4 minutes ago, With a crooked smile said:

This is all true, and fucking well done being mortgage clear at 30! I had 500kish in the bank last year having sold up but have since re purchased. Obvs guess I could bought outright but we've split it over our main residence and some commercial property so on paper still have fairly large mortgages. 

I'm 45, I'm well impressed by what you achieved at 30.

To be fair I am 53 matey, and bought at 18 years old so I had a running start over you when houses were much cheaper. Wasn’t a financial bit of wizardry but rather we needed a house because we had a baby 👶

And I am a incredibly tight git and a saver 😂

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@Pip321 I'm interested, how do you identify these probate sales etc., did you have contacts with estate agents? I'm an early 30s FTB and have a kid now so want to be in an owned house by next year. Budget 450k. But in SE. Would love a 4 bed but it can feel unachievable.

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Bobthebuilder
11 minutes ago, Hardhat said:

@Pip321 I'm interested, how do you identify these probate sales etc., did you have contacts with estate agents? I'm an early 30s FTB and have a kid now so want to be in an owned house by next year. Budget 450k. But in SE. Would love a 4 bed but it can feel unachievable.

Developers+probates+estate agent mates+brown paper envelopes= cheaper sales.

Redeveloped property+ same estate agent mates+ brown paper envelopes = Highest achieved price in the area.

Rinse and repeat.

I have friends that have done this a lot over the years.

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22 minutes ago, Hardhat said:

@Pip321 I'm interested, how do you identify these probate sales etc., did you have contacts with estate agents? I'm an early 30s FTB and have a kid now so want to be in an owned house by next year. Budget 450k. But in SE. Would love a 4 bed but it can feel unachievable.

BobTB is probably right in most cases. Whilst I didn’t have brown paper bags I was persistent, always viewing, always at the local auction etc and then developed ‘friendships’ with the EA network. They knew I had the funds sorted. 

I wasn’t big enough for the good stuff but the EAs knew if they had a real bargain (but a genuine sob story) that the developers could let them down last minute if there was more money elsewhere….whereas I wouldn’t. That wasn’t just integrity but if I let them down I knew it would impact further opportunities whereas the big boys just had mutual mistrust anyway  

First investment we bought was an awful situation where a lady was ill (very ill) and just wanted cash to enjoy a cruise/holidays etc. Her house was already sold for 62k but was worth maybe £75k and the developer last minute let her down…I got wind of it and bought it in a 2/3 week timeframe using the developers solicitor and searches etc. EA happy and was given more similar opportunities as and when….one every 12/18 months was all it took. The big boys got the best deals, I got some crumbs but my scale was lower.

The problem for you is during this strong market then EAs aren’t interested, plenty of people knocking on their door….but developing a relationship in their difficult times allows you to benefit in all markets.

In short, yep I had a few EA l ‘friends’ but due to my real job I needed to keep a reputation of honesty….so I was tight, negotiated very hard and negotiated upfront but was honest and saw the deal through once agreed.

Worked in a small town. Might not in a big old city. 

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Bobthebuilder
39 minutes ago, Hardhat said:

I'm an early 30s FTB

Just spotted that bit.

I was early 30s when I first found HPC, I am now in my 50s.  Scary stuff when you think about it.

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Bobthebuilder
12 minutes ago, Pip321 said:

I wasn’t big enough for the good stuff but the EAs knew if they had a real bargain (but a genuine sob story) that the developers could let them down last minute if there was more money elsewhere….whereas I wouldn’t.

This is an important point.

The developers are looking for detached, semi-detached, end of terrace, so they can extend out the side, back and roof. That's where the big money is. They are mainly not interested in just doing up a standard 2/3 bedders for instance, that's where you might do well to look @Hardhat.

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Joncrete Cungle
1 hour ago, Bobthebuilder said:

This is an important point.

The developers are looking for detached, semi-detached, end of terrace, so they can extend out the side, back and roof. That's where the big money is. They are mainly not interested in just doing up a standard 2/3 bedders for instance, that's where you might do well to look @Hardhat.

That's what we were looking for 5 years ago, looked at a number of end terrace and corner plot semis. Ended up getting one that had already had single storey extension on the living room and kitchen to the rear and a dining room with master bedroom upstairs on the side.

Yet we still have more outside space than the standard semis and about a third more floor space in the house. The mad thing is the standard semis now sell for more than we paid for the bigger plot & extended house 5 years ago! :Old:

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