The UK housing market has not functioned ‘normally’ for five years, a leading estate agency has said. Meanwhile, the LSL Acadametrics report, out this morning, said it expected only 60,600 sales to have been made in August, down 13.7% on July and a long way off the long-term sales average for August of 103,180.
CB Richard Ellis said current activity levels remain fundamentally weak with transactions and mortgage approvals at half the pre-recession levels.
The agent said that in any normal market measured over the long term, there are 1.2 million residential property sales per annum and house price growth of around 3%, with first-time buyers accounting for half of all mortgage lending.
The firm said that 2005 was the last year when anything like these criteria were met.
Jennet Siebrits, head of residential research at CB Richard Ellis, said: “While market conditions have improved dramatically, we do not expect a swift return to normality in the near future. The housing market is showing further signs of weakening and this volatility is likely to continue for a year, as the housing market and wider economy are hit by political and fiscal tightening.
“It would be undesirable to return to the imprudent levels of lending seen in 2006 and 2007, but credit availability will play a pivotal role in ensuring the housing market returns to normality.
“To reach over one million transactions, the mortgage market will need to relax its lending criteria, particularly for first-time buyers.”
The firm made its remarks amid the usual rash of conflicting housing market reports.
This morning, the LSL Acadametrics report said that average house prices grew 0.2% in August, but that sales activity was static throughout England and Wales, other than in London, where sales transactions picked up an astonishing 22%.
According to Acadametrics, the average price of a property in England and Wales is now £222,454 – astoundingly, that is around £50,000 higher than Halifax, Nationwide or the Land Registry's reports.
According to Halifax this week, house prices also increased by 0.2% in August. This was the second successive monthly increase following a 0.7% rise in July, according to the lender.
The Halifax report contradicts Nationwide’s, which reported that house prices fell in August, and is out of kilter with Hometrack, which has reported falling prices in both July and August.
Halifax puts the current average house price at £167,953 and said that activity in the housing market was broadly stable in August.
Martin Ellis, Halifax housing economist, said: “The improved economy, strengthening labour market and low interest rates are all supporting housing demand. We expect that UK house prices will remain static overall in 2010.”
Meanwhile, the National Association of Estate Agents said this morning that the housing market slowed in August.
However, the NAEA said this was simply following the traditional cyclical pattern and that “longer-term trends remain broadly positive and the market is in a strong position”.
Agents made an average of seven sales in August, with only 21% of purchasers being first-time buyers.
The Government has ordered its statistics office to investigate house price indices to see why they say different things.
Housing market is dysfunctional, says agent, as sales tumble
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Comments
Thanks for all the responses. To the clever ones from HPC who feel so sorry for all the FTBers. The majority from that sad forum actually sold their properties to rent. This is quite funny especially reading the comments. They sold their houses at the peak so they could cash in from high prices and then wait for prices to plunge to then step back in. So they actually made money from the rising market and then complain to pull it back down so they can cash in. Hilarious and very transparent ! For FTBers i feel sorry for but there are a lot of FTBers who took the plunge in the last 3 years, why should these people suffer for the sake of the ones waiting ?
HPC forum is full of people who think they are clever when the majority USED the high prices to cash in !
Hypocrites !
You lot really are becoming tedious. Your juvenile "Power to the People" arguments are not - repeat, NOT - going to make one jot of difference in the grand scale of affairs. Houses will continue to sell - some at 'bargain' prices; most at 'market value'. If YOU don't want to become one of the landed bourgeoise because your uni-days leftie tendencies won't allow you, then so be it. Get on with your lives and let others do the same. Can I just point out to you all, however, that the left-wing politicians you all hold in such high esteem ALL OWN HOUSES! Big ones at that - and usually more than one, so they can rent them out to themselves and claim expenses...
Peter Cooksn (numpty who cannot spell own name - should have tried harder at school...) "What a laughable buffoon. You mean the millions of people, priced out of housing? That's what HPC is, you utter plank." NO - WRONG! A "house price crash" is EXACTLY what it says on the tin: A crash in house prices - NOT an inability for a percentage of the populace to afford property. Houses are still selling - despite your (incredibly poor) best efforts.
Paul (uber-numpty...): WHERE is the "blatant theft" you refer to? How can the purveying goods (in this case, property), owned by one party, to another party under a treaty of mutual agreement, be "theft"? To the best of my knowledge, no-one holds a gun to the heads of potential homebuyers.
"How many of you try to put yourself into the shoes of people, who only wanted a job, and to be able to work, and buy a house with their proceeds, instead of paying for the mortgage of a 'liar loan' landlord?" WHAT?? So you are now even blaming Estate Agents for the fact that wages are too low for aspiring homebuyers to meet the cost of property? Estate Agents ARE in jobs - very difficult ones from what I see here, having to deal with divvies like you lot on a daily basis. I suggest you grow up - it might just be the key to landing a better job, which in turn might enable you to afford one of these seriously overpriced houses that are currently out of your reach.
I await the Wolfie Smith-type death threats.... "Up against the wall, PeeBee - bop, bop, bop!"
James,
Supporting one section of a society, [via blatant theft] to the extreme detriment of another section of that society is the very definition of FACISM.
[look it up]
I wonder how many of you estate agents stop and think about what has happened? How many of you kiss your children with those lying lips, [and try to install morality into them?]
How many of you try to put yourself into the shoes of people, who only wanted a job, and to be able to work, and buy a house with their proceeds, instead of paying for the mortgage of a 'liar loan' landlord? Whilst your money is being stolen to bail out the bank who went insolvent through incompetence and greed?
The social damage is immense. [Would it be going too far to suggest that Estate Agents have something in common with holocaust deniers?]
In reality it would actually be a very small percentage, who would suffer If those people, [Including all UK homeowners, mortgage'd, and mortgage free] who would go into neg equity, [the BTL brigade and people who got onto the ladder in the last 8-9 years] if houses were to lose over 50% from their peak valuations, is somewhere between 5%-10% of the UK home-owning population. So by far the minority. [Over half of UK homeowners, own outright] Add to that statistic, a new generation, of youth, beginning work, each year, looking to get onto the ladder, and the minority becomes even greater.
One of the many reasons, why, in a democracy [Hah!] I believe, common sense will prevail, and [house prices will return to their median]
I fully expect houses to return to their 1998 sold prices.
James said:
"Please be aware that a lot of the comments are coming because this page has been linked to the forum House Price Crash. They have a vested interest in pulling prices down"
'vested interest in pulling house prices down'
What a laughable buffoon. You mean the millions of people, priced out of housing?
That's what HPC is, you utter plank.
James your a narrow minded fool, who cannot see beyond the end of his nose.
If you can't sell at the price you want then just wait. The market will recover. Why take a big hit just to satisfy people who are waiting for a crash to cash in on your property. If it won't sell today then wait until it will. Don't listen to the scare mongers and sit tight eventually the market will turn in your favour !
Average Wage FTB: "You can put me in a barrel full of nails and roll me down a hill. I still wont buy."
Let's get something out of the way immediately. I think you mean "...can't buy."
Look - I'm not being clever here. Simply stating the facts. It's not MY fault prices are what they are. MY family are in your position and that crucifies me daily. I feel truly sorry for each and every one of you in the position.
I have a house - bought pre-boom - "worth" three times what I paid for it. I certainly couldn't afford it at today's figures.
This is what the housing market has done, cyclically, for decades. Every 'x' years, there is a boom brought on by exceptional demand outstripping supply. Then it dies: prices generally adjust downward somewhat; wages (affordability) increase and things stabilise. Then - the cycle sets away again! It IS a sustainable cycle - however the peaks and troughs (the 'x' I referred to earlier) will get wider apart.
What all you would-be buyers have to understand is that Estate Agents are NOT responsible for the situation! They do not control the market; they react to it and play to its' strengths (and whenever necessary, its' weaknesses).
Shouting 'Not fair!' on this website gets you nothing. Firstly, for every one of you, there is at least one other who CAN or WILL buy - and MANY who are sitting in their own properties now who frankly don't care what you think, as they do not intend to move at this moment. When they do, they will sell and buy in whatever market conditions prevail.
You cannot bring down the sysyem by having a moan on a site where Estate Agents chatter on. Sellers will not suddenly reduce to 1998 prices because YOU or A N Estate Agent asks or tells them to.
(here's the thing. Even if they did, it would help you NOT ONE JOT. The Investors would dive in and buy everything - just to keep you in rented for time immemorial. And as a result, the whole cycle would kick off again...)
I have nothing to gain by telling you this. I would have far more to gain by joining your crusade - both personally and for my family - IF I thought it was going to change matters.
My advice in that respect - if you want to see into the future, look into the past.
Average wage for my area is £20k. Average house, £189k.
Ten years ago, they cost a third of what they do today. And without the bank bailouts, the average house would have lost over 60% of its value. So my money is being stolen through QE, Taxes, etc, to pay for this toxic mortgage debt. [Or other peoples houses]Whilst keeping houses massively inflated. [Thanks to the Labour party.]
You can put me in a barrel full of nails and roll me down a hill.
I still wont buy.
FTB'ers are on strike.
I will not buy my first house until they return to circa 1997/1998 prices.
Thats it. Thats all.
Bye Bye
James: There are always an element of 'interested parties' who think it's a jolly jape to - ahem - contribute to stories on here.
Let them come. They are gaining nothing; looking like fools; and losing one of their marbles with every toss!
They get sick after a day or so... in the meantime just enjoy knocking cr@p out of their argument. Uninformed people shouldn't join informed discussion - although they all seem to be Master Debaters... ;0)
Please be aware that a lot of the comments are coming because this page has been linked to the forum House Price Crash. They have a vested interest in pulling prices down and have a thread discussing what they should be posting on here.
Wooden Top – I have always reviewed my stock weekly, good and bad markets – there is a number of us in the profession that simply don’t get this concept, oddly though the ones that do seem to be doing rather well and those that don’t have big registers and few sales?! Funny that
It is not easy to get vendors to make a substantial and effective price reductions but with skill, the strength of the agent / vendor relationship and the vendor seeing his / her agent as credible it can be done – sadly for some these are requirements that are hard to come by
Wow is this a record response for EAT, I've lost the plot on some posts.
It seems everyone agrees prices are to high, regardless of cause. It also seem most agree that they have to come down in current market but there are sellers who can't afford to.
May I suggest you grab the bull by both horns and get a head start on your competitors and ditch those you can't (your not going to, so why keep them) and stop taking on properties that want to sell above the market value - simple they are unsaleable and shouldn't go on the market in the first place. Now go and look at you property stock and frighten yourself with what you can sell, after all that is what is about to happen if you want to survive IMHO.
"...standard practice is to get three valuations and choose the middle one." IS IT CRAP! Human nature is based on greed. Show someone a pile of gold, and they will want it - even if it is out of reach. Like you - you want a bigger, better house than you can afford, and it is everyone else's fault. The inept Agents: the greedy vendors. What about the wildly overaspirational purchaser? Hmmm - double standards methinks.
"Of course some buyers will go with the top one." BUYERS!! I think the term you are looking for there is "sellers..."
"...but in my experience..." of what? You don't even know a vendor from a purchaser!
"The bottom line is that it's the agent's job to get the very best price for their client." HOORAY! A modicum of understanding at last! A tiny glimmer of light in the deep darkness of understanding. So, Nick - why don't you take the above "bottom line", and go out and find yourself a Buyers' Agent, who will convince you they will screw down the price of a modest palace for you to your previously-stated £650k max. All for a 'modest' fee...
In the meantime, you and your friends (assuming that there IS more than one of you in reality...) let Estate Agents GET ON WITH THEIR JOBS!
And, no, Nick, I'm not one of them - before you react...)
Jonnie said that ESTATE AGENTS DON'T CONTROL PRICES. However, I would argue that they certainly contribubute to the seller's expectations of what the property is worth. After all, how do sellers know what their property is worth? True, they can look at Zoopla but online valuations can be wildly inaccurate if, for example, the house has been imrproved. No, standard practice is to get three valuations and choose the middle one. Of course some buyers will go with the top one. It all goes into the mix, but in my experience, only prime properties sell for - or above - the asking price. Everything else gets 'offers' (and the typical percentage off can be found online). So, why wasn't the property on sale for that price in the first place? That's a rhetorical question, of course. The bottom line is that it's the agent's job to get the very best price for their client. So, the pressure is always up unless something happens to the economy as in the present situation.
well i was once told that when the estate agents are doing well we all are - my local estate agent is now driving an Aston Martin so I live in hope!
Mind you dont a lot of theese outfits do rentals and sell houses as well so what ever we want to do (own or rent) the estate agents benefit from the choices we all make
Good god,
as a regular on this site im pleased to see so many members of the public here - welcome everyone, we hope you like the site.
Now, lets get something straight, and its a biggie som pleased take note -
ESTATE AGENTS DONT CONTROL PRICES!
Im sure posts will follow from agents and the public that we do and in a small ineffective way yes and agent can over price a property to 'win' the instruction but the prices are controlled by that old friend, supply and demand - also known as what someone will pay for it.
To say / moan / complain / state that we control the market is way off the truth, we cant and dont - the public do and for everyone of you who is waiting for something to happen on prices someone needs to move with a job, leave their husband, have another bedroom etc, etc and who will set a price for the house they want
At the risk of a long windy post (theres been a few below!) for everyone of the last 20 years ive been in the business ive met a section of the public who are waiting for prices to fall, odd that?
Duncan, in my experience its not estate agents over valuing. It is estate agents being too gutless to stand up to the vendors with unrealistic expectations.
They are scared the vendor will only instruct them if they agree to a fairy tale asking price.
That just aint good business and is not sustainable time will show (and is already doing so).
Ray, I can assure you that a lot more sense is talked about the property market in pubs than in Estate Agency outlets. I also have over 25 years experience of the property market. Are you not aware that sentiment is an important factor in the property market? Currently sentiment is not just about how how daft asking prices are but also about how disconected Estate Agents are from reality.
Unfortunately for you (if you are an Estate Agent), and certainly for Estate Agents generally, my views are pretty much typical of what people are saying about the property market at home, at work, in the pub, at dinner parties, and so on. People will start buying when asking prices are realistic again, not before, and yes this means 25% or lower than the asking prices you see being advertised at the moment. If you want to keep pricing property at prices most people can't afford don't be surprised, or moan and complain, when sales keep deteriorating or stagnate at half the amount, or less, seen typically just a few years ago. Estate Agents really need to start listening to the public instead of insulting us when we tell you why we are not buying. Your reputations will simply go from bad to worse with the way you respond to us.
Ray Evans,
You may look down your nose at people who visit the pub but you would most likely recognise this activity if I dressed it in the la-dee-da term of 'networking'. You may think listening to people intoxicated in a pub as unreliable source of evidence but it can be no more unreliable as listening to the rubbish heard from an Estate agent intoxicated by his own delusions that he has created wealth & prosperity by flogging off some new-build rabbit hutch for half a million quid.
Yes, you DO mean over-valuing houses when you talk and wave your arms around waffling airy-fairy positivity because they are STILL over priced now so you just want to pump prices back up. Well, you tool, if house prices were not over-priced in the first place, can you explain why we are in the mess now? Oh yes.. I best beat you to the standard mantra-for-the-clueless 'It started in America'.
If suddenly overnight you 'value' your house at half a million when previously it was quarter of a million (because when you 'value' you are just making up a figure based on your gut feeling) and some mug buys it off you, where did that additional quarter million come from? The truth is it was out of thin air but what prats like you fail to grasp is that money is like energy. It is a physical thing and like a physical think you cannot create or destroy it. It will always be there in some form or other. So how does money appearing from thin air fit in? Well believe it or not.. you are BORROWING IT FROM THE FUTURE AND YOU HAVE TO PAY IT BACK AT SOME POINT. The problem is, the future has become NOW and the NOW needs money but has realised they lent it out in the PAST.
i.e. THERE IS NO MONEY JUST IDIOTS LIKE YOU!
So, you get your information from 'in the pub etc.' Very reliable I am sure. 25%? Why not 10% or 50%?
Sorry to say this but as a property owner that will move up the ladder, once house prices have fallen by 25% or more, I have to say that asking prices are just laughably, stupidly unrealistic. Everyone I know at work, in the pub and elsewhere are all saying house prices will fall just like in the 1990s and that Estate Agents seem completely out of touch with reality. In response to an Agent (I assume) below - no the public don't want positivity for the sake of it, this just makes us trust you even less. What we want is honesty, realism and above all house prices that mean we can buy and have a mortgage that doesn't put us on the edge of bankruptcy! As an owner I am more than happy to sell for much less so that I can buy for much less.
You've got it sussed Chris, you're obviously one of the 'experienced agents' I wrote about in my previous comment below.
You'll likely ride out this storm, still not pleasant to see the also-rans fall by the wayside though, but maybe Darwin was right about natural selection, eh!
Non-buyer: I am in no way belittling people who rent. I fail to see why you think I am.If it is your choice to rent, then so be it. It is a crying shame, though, that countless THOUSANDS want to buy but cannot, and are now facing renting when then do not want to.
Those individuals I was referring to are simply renting property in an attempt to drive down property prices; to then 'grab a bargain' and no doubt sell it on at profit. all this does, is increase the demand for rental properties, thus putting up rents for those like you - and, perversely, keeps the market moving as BTLetters amass even bigger portfolios in which to house them!
Not so clever,then - are they?
The market is not as it was from about 2001-2006, but I doubt we will see a market like that again for many years, and I may not again in my career, but we have been having a good few months. We have been valuing properties very realistically and August was our best month in terms of sales since may 2006.
We have less properties on our books than we did this time last year (because many vendors will simply put it on with the highest valuer), but we are selling, and we have many buyers on our books who can see we have well priced properties.
The people who WANT to sell know we are selling as we have more SOLD signs up than the other 3 agents in our town put together (we have just lost a 4th agent who were renowned for over pricing), so although we have fewer properties on board, we are still getting plenty of vendors and a good turnover.
Agents need to value sensibly or else risk losing their business. The sooner everyone starts realisticly valuating the better as the market will not see the boom years again for many years.
Johnathan, i'm not an estate agent. PeeBee is right, people will not sell below a certain price unless they absolutely have to. That price depends on a number of things, including current market values and the level at which they can get enough equity out for a decent mortgage on the next place. It's so simple even you should understand that. Now get back to your grubby little corner with your other mates from HPC.
PeeBee - don't belittle people who rent, there is absolutely nothing wrong with renting. I have rented for 10 years will continue to do so. Its cheaper than a mortgage and I couldn't care one iota if I own zero at the end. Serve me a S21 - fine, then I'll find somewhere else!
I pay rent to live in a house, it provides me with something - my home! It's not dead money as many say, it pays for me to have a 'home'. And yes, it is a home to me. Not everything in life needs to reward you at the end, when you go on holiday I bet you are the one who packs the bath robes, slippers, toiletries and free refreshments from your hotel room just to make you feel like you have received something in return for your 'hiring' of a hotel room!!
But what have they got now, Nick? Oh yeah - properties worth THREE TIMES what they paid then! No-one said it would be easy, as the song says...
Jonathan Evvans: " If asking prices dropped by 50% you would have no shortage of buyers..."
Two (sorry, three...) points on this one -
1. But you'd have a SERIOUS shortage of sellers as no-one could afford to sell. Builders couldn't afford to build. So what will the buyers do with their money?
2. Prices drop by ANY percentage, the first ones in are investors - so where is the advantage? Ordinary buyers will be swept aside.
3. As soon as properties start selling the way you suggest - in droves - then the cycle starts again. VERY short-term view, I am afraid.
Why is it everyone posting here seems to want to write the future of the housing market? Oh - forget that question - I know the answer... it's so you can all twy to build their ickle pwopwerty empires at knockdown pwices. Isn't it?
Do you honestly believe that higher and higher asking prices are actually good for estate agents? No, seriously - do you ACTUALLY believe that? It should not matter to you whether house prices are at current ludicrous levels or whether they plunge in price by 90% - you should only be concerned about sales turnover. Isn't that how you make your money? Standard & Poor only ysterday issued a warning that the price of houses in the UK are "substantially over-valued" and present a risk to the wider UK economy. If asking prices dropped by 50% you would have no shortage of buyers and you would be making loads more money than you are today - can't you understand that? It is simple economics!
Do you honestly believe that higher and higher asking prices are actually good for estate agents?
No, seriously - do you ACTUALLY believe that?
It should not matter to you whether house prices are at current ludicrous levels or whether they plunge in price by 90% - you should only be concerned about sales turnover. Isn't that how you make your money?
Standard & Poor only ysterday issued a warning that the price of houses in the UK are "substantially over-valued" and present a risk to the wider UK economy.
If asking prices dropped by 50% you would have no shortage of buyers and you would be making loads more money than you are today - can't you understand that?
It is simple economics!
Hear bl00dy hear, Ray!
If everbody keeps pontificating like this the market (such as it is) will be talked down until everyone is out of business. The public like good vibes (and I do not mean overvaluing)-put the best shine on things, give it the best shot you can - it's about selling - that is the EA's job!
Rubbish, legislation is just fine, lending criteria is fine and over supply is fine. Problem is sellers won't drop there prices to realistic levels. People holding out for 2007 peak prices after years of fraud, lax lending and cheap credit.
"Miles" - Put that hand bag away.
Peebee is spot on - I challenge you to find somethng that costs less to buy than it does to rent.
Ridiculous comment initially, backed up by a petty (but very intellectual) post from yourself.
Gents, if we could all stop with the willy-waving & personal attacks and get back to a sensible discussion. It does this site's reputation no good - particularly if "outsiders" are looking in if we behave like schoolchildren. Play nicely please.
I cannot believe the comments being made on here - the market has not even begun to drop yet as it has been artificcally propped up by cheap interest rates and foreign money going into central London based on a weak pound. This money is drying up. I was only speaking to a bank yesterday who have stopped all lending on what they call "tart and turns" with a 50% LTV - the reason? they now have developers that have tarted and NOT turned (and cant!) the market needs to collapse properly and it hasnt - its very very simple - earnings to prices are out, LTV is out, and yields and funding are out for investors - its really not to hard to work it all out is it? GOOGLE the terms "standard and poor's repossessions" and "USA Tent Cities" and welcome to the New World Order :)
Renting can still make sense. Many of those who bought before last century's crash endured negative equity for years.
It's simple. We need changes in legislation as to who can buy what and giving preferential lending to target groups (ie FTBs can release chains). We had a poor budget that failed to address many things, such as stamp duty issues (vacuum stopping props under £250k going over £250k). Government rid us of HIPs (fab) but didnt build into the budget the means to encourage financing and wheeling the cogs. Thus HIPs going has added now to the problem of over availability. We don't want HIPs back, but we do need the government to open their eyes nad give as much focus to private housing as they now give to social housing.
We can also both spell AREN'T correctly. Back to school, I suggest. ;0)
No. But I can hold my own in an adult debate without resorting to insults. As can the Miles Shipside I know...
PeeBee - You're such a know it all COCK arn't you my dear!!
Come on, John! - "It's cheaper for me to rent than buy..." Yeah, AND?
It's cheaper to buy no shoes and go around barefoot, but you don't.
You continue to rent. If you're real lucky, your landlord won't serve you a S21 notice, and you can live there for 25 years - and then you'll still own ZERO percent of the roof over your head!
Buy - you own oneself; rent - you hire from another. And you expect that to cost you NOTHING extra? Unbelievable!!
drop the prices and I will buy. It's cheaper for me to rent than buy -until that changes the market will be 'dysfunctional'. Price cuts = volume - simples.
Just in case people don't realise, there is a co-ordinated campaign by a certain website to leave comments on all articles relating to house prices, in an effort to talk prices down. i think we can see which comments are from members of that site.
It's complicated. That's both life & house selling, I mean.
Someone said they don't blame the agents but then in the next breath an agent pricing sensibly loses out to one who overprices. So you can blame (some of) the agents.
Different sellers have different circumstances - the brink-of-negative-equity ones; the cash sellers who aren't in a rush; the cash sellers who want to get on with their lives. So you can blame (some of) the sellers.
The lenders have varying & often intransigently daft lending policies. So you can blame (some of) the lenders.
Government policies. So you can blame (some of) the government policies.
You get the picture.
Then throw in a few variables like geography, history, social sciences & some of the 7 sins & what do you get? A complexity that results in what can justifiably be called dysfunctionality. It's not new. It's just sharp end at the moment.
Sounds like Farnham? Most of the EA's around here still seem to think it's 2007 all over again, and "all that needs to happen is to get the banks lending , and the market will take off again.." No way, the days of easy credit are over - they need to get used to it, and start pricing accordingly. NOT over-valuing everything, at rock bottom fees to get the instruction, and then having stuff sit around for months (you know who you are Splodge!!)
Paul: You must be getting on a bit!
I also remember the fee structure that you quote.
After nearly 40 years I sold up and retired a year ago - what a result!
However my view is:
1. Many vendors still owe so much on their houses they cannot reduce the price.
2. There are many advantages in renting for a few years and prudent people can save the savings (if one thinks about it they can be considerable) for a deposit.
3. Supply & Demand will
eventually bring a balance.
4. Events, dear people, events?
Good luck to all EA's during the next year or two - the best will survive!
Pyracantha: I am not Paul. Nor am I Chris. We just all share a common view.
I have never said on this site that prices are too high; too low; or whatever. Prices are prices; sales are agreed when buyer and seller negotiate a mutually acceptable figure. You can ask what you want - it's what you GET that matters. And what you seem to forget or simply don't understand is that an Estate Agent is duty-bound to his client (the Vendor) to achieve the best possible deal. Overvaluing a property in order to secure instruction is, in my opinion, a crime; that doesn't mean that the property cannot sell - however the offending Agent then has an uphill struggle with his client which could have been avoided or at least reduced had they not cheated in the first instance.
MY point: If I had a pound for every time I was asked "When is the best time to sell / to buy?", I would be a very rich person. My answer EVERY TIME - "When it feels right for you." If you see a property you would like to buy, it is statistically probable that there will be someone else who shares your thought. If you decide against it, you cannot then blame anyone other than yourself if later the decision is regretted.
You are what I wouold describe as a RUA buyer - Ready, UNwilling and Able. Your choice. I hope it works out for you - but I have to say that the great majority I know, do eventually admit they wish they hadn't been so... erm, sorry for using it again... blinkered at the time.
Last question. You state "I was realistic about my selling price and sold to the second viewer." Are you prepared to concede that maybe - just maybe - your price was a tad UNrealistic and that you may have achieved the same result at a higher figure? Please, PLEASE, tell me you didn't agree to reduce from your Asking Price to effect a sale to only the second viewer!!
The experienced agents will be focusing their energy on getting chains sorted out based on lower prices (convincing all in the chain to revise their expectations, they sell for less but also buy for less) as that is the only way they will generate sufficient sales to stay in business. Those who do not will be stuck with a window full of overpriced property that will stay on the market and not give them any income. Sellers who are serious and not just on an ego trip will see that others who have achieved a sale and have now moved on and are getting on with their lives did so by going through agents who told them the truth about prices and not those who told them what they wanted to hear.
Well put AgentOrange - the housing market is collapsing and many EAs have not yet figured it out yet.
More alarming is how many of the younger ones have no memory of the housing crash in the 1990s when people were handing back their house keys to the building societies - so-called jingle mail.
These youngsters can't get it into their heads that house prices can plunge and plunge by vast amounts - it has happened before and it is happening again now.
But many are either too young, too inexperienced, too egotistic or, frankly, too stupid to realise this. They will still be wondering what went wrong when they are signing on the dole.
It is quite a dilemma for EAs though - you have convinced sellers that their houses are worth ludicrous asking prices and it is tough for you yourselves to get your heads around the fact that houses will probably crash 30% or more in the coming years.
Now you have the problem of convincing your sellers that they need to reduce by 25% just to get people viewing!
Yep! The old model of price high to get the instruction, then sit back and wait for the vendor to realise or the market to catch up ain't working any more.
In a stagnant/falling market you actually have to work for a living, get persuasive, learn to negotiate, bullsh***ers need not apply, this one's gonna sort out the men from the boys!
Yep - seems to be a glitch. I've had it a couple of times this week. You send the comment and it says the verification is wrong. You re-submit and it goes to a random thread.
Yes, but your attitude stinks. Yawn.
Ace of Spades well put.
Paul, your not alone, you made my day, good one mate.
And yes asking prices are to high in todays terms.
PS. There is a glitch in EA posting system, I found myself on another thread?
Judging by the diatribe in this column there are quite a few people who have nothing else to do.
The market is...The Market.
Start negotiating, get viewings, get offers, negotiate sales. Negotiate higher fees on the back of success.
Thats why you are called "NEGOTIATOR"
An Estate Agent in Swansea told me last week that the property market was dead in Swansea and that it was now a buyer's market.
The problem is that several of the Estate Agent chains are choc full of houses with asking prices HIGHER than the height of the 2007 bubble. Prices are completely disconnected from reality. Some of the Estate Agents, IMPO, are on a masive ego trip and are very much part of the problem.
You EAs should be talking asking prices down to get the market moving to keep yourselves in work. You appear to be so hung up on the ego and self-pereived status of trying to flog vastly over-priced houses that you are all slowly going out of business - and you don't even realise it.
If you had any sense you would be talking your sellers down re their asking prices and not taking a mere 10K off a 400K or 500K asking price but telling them bluntly that they are 20% and 30% - probably more - over-priced.
I look around at asking prices in Swansea now and when I check the land registry I see numerous houses on the market that want 50% and 60% more than they last sold for in late 2006 and throughout 2007. Nuts!
One Estate Agent told me recently that because Swansea was so reliant on public sector workers that banks were now beginning to limit mortgages to 2.5 times salary. If true, the great British housing crash is just months away.
A house is only worth what a buyer will pay for it and not what the ego of some seller or EA thinks it is worth!
Watching the collective job suicide of EAs talking up the housing market is hilarious!
The worst agent I have ever known for over pricing and reducing his fees, a double whammy to buy the vendor is an idependant. However I know more corporates and big chain independents who do it.
John, how is the property prices in your area to high? or is it what you are prepared to pay? or can afford? Were they not selling higher before? How do you work out when the price will be right? Then try telling a vendor! Hopefully you get my drift and certainly not argumentative, for these are some, certainly not all of the issues for estate agents to get to grips with vendors.
@Paul (PeeBee). Why all the vitriol? Even the EA's here seem to be agreeing that house prices are too high and that they have a challenge in getting vendors to adjust expectations.
Dear Pyracantha, stop wasting time writing here get a life.
I agree with you Nick, get the price right or say no and tell vendors to go elsewhere. I am staggered there are still agents doing less than 1% fees on overpriced properties. Good job too and the more they do this the quicker they will go out of business. I am old and when I came into the business fees were 5% on the first £500, 2.5% on the next £4,500 and 1.5% on the balance. We made a good living and did not need to open on a Sunday (I still dont and tell people Sunday is a family day). Then the brainless white sock still wet behind the ears with no idea of economics entered the market place with their 'I can sell this property for much less money than anyone else' attitude and they got a good share of the market. But then the day dawned on sensible agents who realised that this would never work and they then had to try and put their fees up. What a surprise. Agency has been a dinosaur for years and years and I have diversified and now dont need to sell houses to stay in business.
Go away Mr numb nuts Pyracantha and welcome Nick's of this business and long may you and me survive because I say no to stupid low fees as well.
Supply is (far too) high. Demand (people actually able/wanting to buy property) is very low. Do the math...
I don't understand the sudden wave of the public commenting on this site that prices are too high...??
Make an offer! A property (or anything for that matter) is only worth what someone is willing to pay.
With buyers offering 'reasonable' sums for over-valued property, we'd start to see a bit more happening in the market.
It's shocking that so many properties are still over-valued. If most agents continue to refuse to reduce their prices accordingly and lending remains the same, where can we possibly go from here?
@PeeBee. Oh dear! Wrong side of bed this morning? You seem confused between what is right for you and what is right for other people or what suits their personal circumstances. If you can't be bothered to see that we have an economy built on sand and that we are going through a painful transition then good luck to you.
Pyracantha: How you bear the weight of your Crown of thorns beggars belief! Chill, please - you'll bust a capillary!
I have several mantras - the one you quote is not one of them. Try this one - " a house is a box to live in". Or this - "a property is only worth what a buyer is prepared to pay for it". Look at yourself in the mirror - it is actually YOU who believes that particular quote - otherwise you wouldn't be waiting until prices hit the 'bottom' before you
buy!
For your information, I have 'made' money on homes I have owned; I have 'lost' money on others. I still wake up every morning - so where's the problem I ask you? What is MOST important is I have a roof - MY roof - over my family's heads.
Be honest with yourself: the reason you won't buy now is because you believe you can save a few bucks by waiting - full stop! So, in the meantime you miss out on properties which may well tick all of your boxes in the blinkered (there's that word again...) belief that come the revolution same said perfect property will be sitting waiting for you at a fraction of the price. WRONG!! But don't feel too bad - you are not alone by any means. You will jump on the bandwagon at the same time as all those others - properties will sell before you get there or you will be outbid (and no doubt you will be the first to shout about nasty Agents gazumping you...), and then you will pay too much for a property you don't like just because it fell into your pricebracket and you didn't want to miss out any more. I've seen HUNDREDS like you. Some listen - most don't. Fine - I'm just being objective.
Last question. Your last car - did you lose any money on it when you sold it?
Funny how NOBODY ever seems to cry over that...
I live Surrey/Hants border and am looking to buy a family home with a large deposit. Houses in my area are from what I can see above 2007 prices with very little moving. The few agents I've spoke to are still very unrealistic in their pricing and the opinions they've shared with me, these are not national chains either. Very disappointing and as such I refuse to participate until some sanity returns.
The price of a commodity is what the market will bear (sic).
Property prices are only to high when afforadability isn't there. Lenders do not generally use income multiples anymore, now it's based on afforadabilty of disposable income and that is the problem. People can't afford the current prices which investors were more than happy to sell for a profit, just like home owners when it all became redicculous and everyone knew it would all go pear shaped and lead to where we are today. Stop bashing and complaining it was his or her fault, everyone and I mean everyone had a part whether intentioanl or dragged along.
Fact: Either afforadability increases or prices go down so that they match. Then the market will be on the road to recovery. Until then it's going to get very messy for vendors, many of which will and do refuse to see the loaded shotgun staring them in the face. It takes a strong agent to walk away when competitors will ridicule them for doing so and take the business knowing it ain't going to sell, but keeps head office happy with stats. That regrettably is a fact of life.
Vendors are slowly coming round to the idea of lowering their prices - I've had a former vicarage on my books for 3 years and they have slowly followed the market down - always behind it. 3 years ago they had an offer from a cash buyer of 200K MORE than it is now on the market for. It is now on the market for EXACTLY what they pulled out of ANOTHER deal for, because they were gazundered down to a price they felt was unacceptable (the new asking price 6 months down track). An offer just came in at 12% below asking and AGAIN they have rejected it. I've strenuously suggested that they take the offer but they probably won't. It's very frustrating from OUR side of the fence too!
Whereabouts in Berkshire are you? I'm looking to buy in Wokingham - very little is selling but still agents seem bullish.
@Chris. Sorry you've made a few incorrect assumptions. I was realistic about my selling price and sold to the second viewer. I am not trying to make money out of buying cheap - it just doesn't make sense to buy now when the market is so out of kilter. I am looking at a medium/long term view despite what you think. Good to see that you understand that sellers aren't accepting sensible offers, though this somewhat contradicts your advice to me. So tell me - would you buy now?
I can see the headline now 'Estate Agents on the make force vendors to reduce asking prices'. I'm sure we all try and provide the right advice to clients who want to get moved its just that many of them feel that there is now pressure and we need to remember the fine line between whats the right advice for them and what's right for us. Pyracantha-if you're buying a home get on with it and make the right decision for the medium to long term, if you're not find another commodity market that's easier to get in and out of. I have a very vivid memory of working in London in 1999 and there being lots of smug people bemoaning high asking prices who had sold up and rented to wait for things to fall in the absolute certainty that they were right....only to be rushing to buy back into the market by the end of the year and if they were lucky being able to get in on the level that they left. Many sadly, are probably still renting..and hoping. I'm sure you were perfectly pragmatic when it came to selling your own but I have a feeling you were like virtually all clients estate agents deal with keen to get as much for your own as possible and buy for as little. Maybe you should set your sites just a little lower.
Even though I understand why many vendors aren't as cooperative as we would like about their asking prices its still incredibly frustrating when they can't get their heads around a perfectly reasonable offer. But thats always been the case it just matters more now.
Ken - good for you, it's great to see some common sense. I realise that educating your vendors is no easy task. I see properties in my search area that have been on the market for over a year, slowly chasing the market down but always by not enough.
It's not rocket science.... Property prices are too high.
Why would a Bank lend a first time buyer with even a 10% deposit if their opinion is that the property market generally is over priced buy 15%. This would be too risky. In the early nineties the property market was awful bad at the end of it at least frist time buyers could by and people could get back on the property market within a few years. The rates have to go up at some time and multiple repos have to happen buy to let investors have to give back properties, and first time buyers will buy them. and the market has to go down by about 20% -30% in line with the rest of the world's buying hotspots.
1. It's a market with polarised buyers. FTBs are screwed, but those with decent equity can & do afford the higher prices. Most vendors are willing to wait - sometimes double the normal time.
2. Now the EU is making banks build up reserves even further, mortgage availablity is only going to get worse.
3. The overdue public sector spending cuts have not started yet. If the old money liberals in Downing St would slash corporation tax, we might see a return to enterprise in the UK.
4....err...that's it.
@PeeBee. So I am self-centred about my wish to buy a house at a realistic price? In which case there are a lot of self-centred people out there. Blinkered - no I don't think so. What foolish comments. I suspect you are one of those people who believes the mantra "houses only go up in price". I suggest you do your own research and make an effort to understand what is happening in the broader economy. Just because 60,600 made purchases last month does not make their decisions wise or something that I should follow mindlessly. Buying a fixed asset in the current market is like catching a falling knife - you don't, you wait till it has hit the ground. I appreciate your concern about me missing the bottom but that isn't likely to happen.
The selling public need to be educated. A property is worth (a) what the public feel its worth ie no viewings = no sale (b) what and individual offers, as longs as there's is the only reasonable offer and (c) what a surveyor feels its worth which is basically risk accessment. With house asking prices still not far off 2007 levels across the country and sale prices probably at 2005 levels, something has to give. And yes too many agents in the high street all fighting over limited instructions and with Corporate agents all trying to justify their high fees with stupid asking prices and long term agreements. If this had been the case in 1993 no agent would have survived and theres probably four times the agents there were back then.
Agree.
There should be MANDATORY, regular subtitles throughout these property-porn shows stating when they were recorded.
Until vendors get used the idea that their properties won't sell at 2007 prices, we'll have a sticky market.
Agents can only do so much to encourage lower asking prices - vendors are still likely to go with the highest valuation, hence it only takes one 'rogue' agent to secure lion's share of local instructions.
Forced sales will help re-calibrate the market but until we see a catalyst for the 'next leg down' i.e. IR rises (unlikely for next 6 months at least) or mass unemployment/double dip economy, it's going to splutter on with low transactions - an EAs nightmare.
I agree with Pyracantha, too. And I'm in the same position. I don't blame the agents, though. It must be galling to value realistically only to have the seller sign up with another agent at a higher price. For what it's worth, there are three things that sellers seem to think will improve their house but which I (as a buyer) do not appreciate. (1) They extend without regard to the balance of the original house, simply to get an extra room. On one property, for example, the extension actually blocked access to the garage. On another, it reduced the garden to the size of a courtyard. (2) They put in upvc windows and conservatories on period properties. (3) They sell off part of their garden, thereby ending up with an ugly house that's too close to their own and their own garden ruined.
Clearly vendors wanting too much money for their homes. Do they not understand the economic climate or are they still watching 2007 property program reruns. :(
Can you expert estate agents please make up your minds!! First it was HIPs that was slowing the market then banks not lending and now vendors want too much money for there homes!!! Which is it!!!
Higher house prices
leads to:
increased cost of living
leads to:
pressure on wages to keep up
leads to:
less competitive workforce compared to lower paid foreign workers
leads to:
more jobs moving overseas
eventually leads to
total economic collapse
It's a mugs game. The market is dysfuncional because
A: People cannot get their hands on cheap easy to borrow money.
B: People are slowly starting to wake up (not before time I might add) and realise that you cannot get rich and or have a functioning economy based on selling houses to one another on the borrowed money mentioned in A above.
I would estimate that houses have around another 40 to 60% to fall before we have a functioning market, you know one where people can actually afford to take part without selling their soul to the Devil!
"The market is dysfunctional"
I dont understand. A market is where buyers and sellers come together. They negotiate, and either come to agreement on the price for a sale, or disagree and walk away.
That is how it is supposed to function. That seems to be how it is functioning. Or am I missing something?
Oh, it's your volumes that are dysfunctional, that's because you've talked up the prices to the point where no-one can afford them any more.
With the current economic climate and reduced lending, you'll just have to talk them back down again and perhaps your volumes will return.
STOP PRESS- i've just advised a vendor to drop their current asking price by 7% but they have declined in doing so because the vendor "has heard a rumor that prices are going to rise in September!!". Shall we sit back and see what happens then??? Errr No.
The housing market is dysfunctional because house prices are far too high. Activity would clearly pick up if sellers would drop their prices to reasonable levels. There are lots of us portential buyers out there with deposits ready to jump in. However prices are still above lending salary muliples. We need higher interest rates to generate more forced sales and break the imbalance.
I'm in the same position, Pyracantha. The good news is that some estate agents are beginning to listen. For example, Andrew Davidson, senior negotiator with Pritchards in Bath, is aiming to have a big flush out of stock that's been on the market for several months: 'Owners need to review prices and, if they don't want to, we need politely to suggest that they try elsewhere.' Other agents will have to follow suit - or go out of business. In my area (the Cotswolds) it's already happening. A property for £650k is now down to £575k.
I actually agree with Pyracantha! I am an agent who has communicated offers which I feel are excellent in the current market to vendors only to have them reject them. Then four months later (when the house is still on the market at an unrealistically high price) they complain that nothing is happening and that "mmm perhaps we should have taken that offer......."
Time to reduce your price to current market levels or take it off the market!
I would like to know whereabouts those 60600 buyers have bought - here in Somerset the market is "flat" despite realistic prices - mine included
Dear Pyracantha. As you can see in this article, in the last month alone 60,600 purchasers did not have your self-centred and blinkered view, and bought property. If you wait for prices to bottom out, two things will happen. One - you will have wasted money on rental which could have been purchasing a house for you; two - by the time you wake up and realise the market has bottomed out, it will be already on the way back up! Do yourself a favour - buy now. It will make you a happier - and therefore less thorny - little bush ;0)
That's due to their still being too many Estate Agents.
Dear Estate Agents, as a prospective buyer, who has sold with cash in the bank can I give you a little advice? Please educate your sellers that to get a sale, they will have to drop prices. The market is stagnated due to unrealistic expectations.