The number of homes sold in July in the United Kingdom totalled just 79,000 – over 10,000 fewer completed transactions than in July last year, according to HMRC.
However, transaction data could be fractionally rosier the next time the taxman reports.
Mortgage approvals for house purchase inched up in July, according to the British Bankers Association.
The BBA said there were 33,417 mortgage approvals for house purchase in July, compared with 32,123 in June, and ahead of the monthly average of 30,695 for the six months to July 2011. The average size of the loan made in July was £151,500.
Nevertheless, the two sets of figures confirm the very low levels at which the property market is now running, compared with five years ago.
Back in July 2006, there were over 148,000 transactions, while in the year as a whole, more than 1.6m homes were sold. The figure roughly halved last year to 880,000.
In Wales, sales volumes in July halved from 6,000 five years ago to 3,000, while in Scotland they went down from 13,000 to 7,000 over the same period.
In Northern Ireland, sales quartered – from 4,000 in July 2006 to 1,000 last month.
Housing analyst Henry Pryor said: “Asking prices remain unrealistically high as sellers struggle to accept the reality of a falling market. The problem remains that there are few buyers who can actually transact.
“Whilst there are huge numbers of ‘tyre kickers’ looking at websites, those who qualify for a mortgage or who have the additional equity required are small in number. As a result, only one in three homes is actually selling.
“In 2007 the average first-time buyer saved 35% of his annual pay as a deposit for his house and he was able to borrow 95%. Today he needs a whole year’s pay as he can only borrow 75%.
“With average house prices according to the Land Registry still 16% below their 2007 peak, there are now a million people who have lost all the equity in their homes, and who even if they could take the psychological hit on the price they had hoped for, no longer has the necessary equity to put down for the next property.
“These people are blocking the homes for the current generation of first-time buyers and are, to all intents and purposes, prisoners in their own homes.”
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Comments
rant: "...I've said to those posters that if they are so convicted and certain of their views, then they should go and post them, politely, on HPC. To date none of them have done so. That speaks volumes to me."
I'll take it that you include me in with this...
Rather than letting it "speak volumes", how about considering this:
Why would I want to argue the toss all day on YET another platform about the pros and cons of homebuying? You and a couple of others keep me more than busy enough on here with your intelligent and reasoned debate - not to mention the many others who simply get a short sharp backhand when they are abusive to other posters - so get the same in return from me (without the obscenities...). They can say what they want about me - as I have said before I've been called far worse from people who KNOW me - so a few insults slung at an anonymous poster from other, similarly anonymous, complete strangers ain't gonna make me look for the first bridge to jump off, is it? ;o)
I have as much disagreement (if not more...) with certain Agents and Industry Professionals as I do HPCers, as you will no doubt have seen.
The property industry is far from perfect, rant. I will fight that in my own little way from within. I will gain no ground doing this on the HPC website.
The purpose of an Agent (or anyone involved in the sale of property) can be seen in two ways. They have a duty to whoever employs them to use their best endeavours to sell the property - and for the best achievable price. Although they have no duty to a prospective buyer, they obviously have a vested interest in that buyer actually buying through them - and therefore the Agent offers properties and aims to sell a property to them in preference to another Agent taking the business. However, as no guns can be put to heads to 'force' decisions (as has previously been long debated...), it is the buyer who ultimately decides where they buy - and therefore who from. Agent simply needs to have the right property to match with the right buyer.
As the whole ethos of HPC is RESISTANCE/REFUSAL to buy until such time that prices bottom out (wherever that mythical level may be...), then me or anyone else joining in order to argue the virtues of home ownership would be not only futile - it would be sticking ones head... or other appendage... in the lion's mouth and inviting it to bite down hard!
As house prices come down, the voice of many a bull has become rather aggressive and vindictive. Although I have always strived to be polite and civil, the amount of unwarranted verbal abuse I have received from house price bulls on this site is considerable.
I'm grateful to other posters who have come to my defence, although in reality I take aggressive comments directed at me as a sign of the amount of fear that there is out there.
In response, I've said to those posters that if they are so convicted and certain of their views, then they should go and post them, politely, on HPC. To date none of them have done so. That speaks volumes to me.
@RnR said -- "Intelligent debate from house price bulls is welcomed as long as it is constructive"
It has been claimed elsewhere that at the last great culling of the bulls on hpc, one of the moderators posted that bulls had been banned so that any newbies coming along would "know their arguments had no veracity".
Funnily enough that happened just a few months into the large price rises of 2009, whilst the bulls had been tolerated when prices were falling in 2008.
That doesn't sound like a place which "welcomes intelligent debate".
Can you dispute that assertion?
Are you really naive enough to think that hpc welcomes any bullish poster that is polite?
I think many have found hpc very useful and informative, and from what I've seen those that have bought have had the insight and balls to negotiate effectively to get a deal that suits them and their families.
@concerned - you can slag off & dismiss hpc as much as you like but it changes nothing. Just as the frequent slanging matches here don't actually change anything - quite amusing though. The market is at an interesting point, and the 'professionals' need to realise that it's not only those that are unable to buy frustrated with the situation, but an increasing volume of people who would buy, refusing to buy at the inflated prices being asked - all ages, all incomes. If this is the market you want, you can keep it. If we 'miss the boat' (arf) then we'll take our dosh elsewhere.
@RnR - enjoy your posts. Here & elsewhere.
lou
As you'll see on most HPC threads, for every member online, there are another two 'visitors'. So there are more reading the site than just those who have registered.
Intelligent debate from house price bulls is welcomed as long as it is constructive and not solely in the form of taunting regular posters. Those that have proven that they can't contribute positively to the discussion are banned. If EAToday's membership were more rigidly enforced, then the same would happen here (and going by recent threads, that might not be a bad thing).
There are no doubt those who read the site and buy a home (rather than an investment). If it works for them financially and information on HPC has guided them in that decision, then why not.
For what it's worth, I only returned to the UK in early 2008 and could have just about bought then. By a rough calculation, I have however saved close to six figures by renting rather than buying the type of accommodation I have lived in. I'm grateful to the landlords who have taken the hit on their capital over those three years on my behalf and continue to do so, whilst supplying me with a new boiler, front door and more.
@RnR
The 26,000 hpc memberships include all the old and inactive ones since the day the site was opened.
There are currently no more than a few hundred active posters, and I'd be surprised if more than a couple of thousand distinct log-in's have been used in the last 12 months.
Also regarding "bulls" on hpc, from my occasional perusals of the site, and from reading house price forums elsewhere, it rather seems hpc bans dissenting opinion rather than them "disappearing never to be heard from again".
Which always strikes me as being a bit weird.
Surely a site for debate of house prices should welcome an alternative viewpoint? And if your argument is too weak to stand up to scrutiny, banning dissenters is the worst thing you could do. It just leads to confirmation bias and dangerously wrong perspectives.
Hence why every few months another batch of "bears" wakes up and smells the coffee.... Realise that for most people it's pointless and expensive waiting, and usually give in and buy a house. Having already bought a quarter of a house for their landlord in those wasted years on hpc.
Just to butt in, to stick my hand up to a question a bit further down and add to the HPC census - I am female, household income around 100k.
Looking to upsize - seen asking prices rocket. Disappointing offerings for around 650k. Thinking of leaving the UK, retiring early, and giving children much better quality of life. Am not alone in being agog at asking prices - many friends with decent buying power staying put due to what's seen as ludicrous market conditions - all professionals with good earnings. Not FTBs in 20s at all.
HPC is mixed bag. Useful economic information there. Some very intelligent & professional people.
Some of them are boring and pointless it's true. Imagine if the same thing happened here as on HPC, just Agents agreeing with each other? I'd rather stick a blunt stick in my eye.
Some are plainly just looking for an arguement, and those we should ignore, but I do like the debates and discussions that go on!
Country Lass,
I agree with you, but....
It is every story. Whatever the topic! HPC'ers drone on about drop prices. It is boring, repetative, meaningless and far from constructive.
IT IS EVERY STORY, EVERY WEEK, EVERY MONTH.
I am contemplating not watching anymore. It bores me stiff and It has nothing to do with estate agency.
Watching, I don't see what RnR has said as a 'playground mentality', not really. If HPCers were disagreeing purely for the sake of it then yes, but they are airing their views (and in the case of some doing so very well without being offensive or rude about it.)
He uses the word 'discussion' partway through, and I think thats what most of these forums are designed for. Centuries ago, we would have sat round a table or parlour etc and aired our views. Well, you guys would have, I probably would have been stuck out with the 'little women' sewing and simpering in case my poor female brain melted. Pah.
So, I like having Rant and some of the others on here, means I get to hear another viewpoint from mine. And unlike a certain person who shall remain nameless, If I hear an opinion or view I agree with, I am willing to review my own thoughts.
The truth is out, and explained well.
No more than 10 or so HPC idiots posting on an EA website with no other purpose than to cause disruption, gain reactions.
School playground mentality.
Toddle along you idiots. Go disrupt a BNP forum.
Amongst HPC's current 26,463 members, there are indeed numerous ladies. The ratio would be about the same as female EAs posting on EA Today. If you're really interested, I could ask if any of them would like to post here.
Alternatively, you could just visit mumsnet. That's a site unsurprisingly full of women. If you do start browsing over there, be ready for lots of hugs and references to other family members as darlings etc.
Here are links to two threads about HPCers earnings etc. It's split into over and under 35s:
http://www.housepricecrash.co.uk/forum/index.php?showtopic=154242
http://www.housepricecrash.co.uk/forum/index.php?showtopic=154269
No secret that there are a significant numbers of IT programmers (there are EAs too).
HPC is often depicted on EA today as an advocacy site, with posters united in their bleatings for lower house prices. That's inaccurate though. It's a discussion forum, with a variety of views.
Previously members there had to identify themselves as either house price 'bulls' or bears'. Many of the bulls left in 2008 though, never to be seen again. This has affected the cut and thrust of debates on HPC. Today, if someone over there says 'I think UK house prices are unrealistic,' another poster will reply 'I think you're on to something' and a third comment will appear saying 'I agree'. It's not exactly a thrilling discussion.
However, what happens if a HPCer posts on EA Today that they think UK house prices are unrealistic? Within a microsecond, a Boomer BTLer will post about how houses cost the same now as the two bob and ten they paid back in the day and how FTBers should be screaming at banks to let them borrow ten times their salary to buy an end terrace with on-road parking.
And then the fight begins...
You know my girl HPCer thing (there isn’t any, or doesn’t seem to be) is there any HPCers on proper dough or are they all average income chaps?
The HPC club seems to be £25k a year blokes
Just an observation, I expect to be told im wrong on so let’s try one more time – if you are HPC – female and on £60k a year put your hand up please. Im starting to think there is no such person
Jonnie
P.s - Rant, i take it youve been on your holidays too, good to have you back
They know what their doing RANT, they use that mouseprice.com thingy dont they?
Even mice have been priced-out too...
HPCer conversation!
A: I'm in a big trouble!
B: Why is that?
A: I saw a mouse in my house!
B: Oh, well, all you need to do is use a trap.
A: I don't have one.
B: Well then, buy one.
A: Can't afford one.
B: I can give you mine if you want.
A: That sounds good.
B: All you need to do is just use some cheese in order to make the mouse come to the trap.
A: I don't have any cheese.
B: Okay then, take a piece of bread and put a bit of oil in it and put it in the trap.
A: I don't have oil.
B: Well, then put only a small piece of bread.
A: I don't have bread.
B: Then what is the mouse doing at your house?
Looks like HTL or WTF (or whatever other monicker suits...) has read their posts properly overnight and has quietly left the room without drawing attention, dunnit!
Wise move. VERY wise move...
Leave intelligent HPC debate to rantnrave and Sibley's...
Jonnie: Welcome back from your hols, mate! For one awful minute I thought you'd done a 'wardy', leaving me and the few remaining stalwarts to defend the world against the HPC - and some Agency sympathisers they seem to have recruited/brainwashed along the way...!
It seems, however, that even rantnrave doesn't agree with this new bunch - or he'd have been in on the chorus... if not leading the shout.
I like your idea of the HPC being a 'Brotherhood'.
What would the Council Members be called?
Great Whingers?
Grand Mutterers?
High Hopers?
Look forward to other suggestions! ;o)
@Jonnie
> id love to hear from the girls of HPC
You kinky old perve, you.
I dunno, a bloke takes a few weeks off for a bit of sun with his Mrs and kids and I come back to find that absolutely nothing has changed here, same old stuff, same old faces with a couple of new ones (nice to see) but still difficult to resist having a look at what you’ve all been going on about.
You see, this used to be a site where agents got together and moaned about the cost of Rightmove, took the pi55 out of the Corporate’s and had a bit of banter.
………….but, the flippin HPC lot have overrun it and at first I didn’t see why, they have a cracking site of their own to post their views on, it gets way more visitors than this one, its got more content, more depth, more links to other data and all that, so, as I say I just didn’t get it – its like a bunch of blokes drinking in a decent boozer that has all they could need and then they start going to a scruffy little one down the road some nights.
However, ive got it, I have sussed out why we have this lot ‘in our pub’ you see they are chaps that love a fight (odd none seem to be women?!)* and that’s something they don’t get at the HPC Arms as they all get on so well, they can post all they stuff on the market and they all agree with each other, where is the fun in that? I don’t blame em.
At least here they get a bit of conflict and those that want one can have a proper scrap with the benefit of being able to post anonymously, do a bit of old fashioned agent baiting and talk about how they have huge deposits, money in gold and don’t care for buying until they are ready / happy to.
I think we need more of it – its good fun, it can be very amusing for all and as EAT seems to have removed the counter of the number of guests on line I assume numbers have tailed off a bit so all 6 of us that are here can debate these issue from both sides.
……………………one last note for @Lost For Words – it does depend on where you are sir, im sorry but the prices move at different levels in different areas, but if you were in my area, we here at Jonnie & Co think you are looking at £300k, But id need to see it.
Jonnie
*are any HPC’ers women? – it all seems to be slightly cross / odd men – weird but id love to hear from the girls of HPC – if there are any of course, it might be its all (ahem) men and the ladies don’t like it there, just a thought…………….but using the pub analogy it could be that the HPC Arms is a ‘special bar’ or a sort of Masonic lodge?
Thank you for your very helpful expert comments
I require nothing more.
"Asking prices remain unrealistically high as sellers struggle to accept the reality of a falling market. The problem remains that there are few buyers who can actually transact." - says Henry Pryor, the BUYERS AGENT! (only a housing analyst in his spare time...)
HIS problem, therefore, is that there are obviously LESS BUYERS seeking his services, so he has to reinforce the 'need' in people's minds to engage his likes by perpetuating comments such as these.
Henry - why not pack in the buyers agency, give the pigs a rest, and go work for Bernard Matthews as a turkey herder?
I'm sure you will excel at inviting them all to Christmas Dinner... ;o)
£200k
Or £225k if you put some twigs in a vase
Chip, You need to start making your money work for you, then you could live in a palace, like mine!! OK
£600 a month, shame on you.
I'm a very experienced expert.
If the kitchen is new, I'd revise my estimate to nearer £550k.
Have you considered installing a swimming pool and helipad? If so you could sell to a Russian Oligarch for about one hundred million dollars.
Everything done in last two years.
Any more expert advice? Most on here seem to talk in very general terms. Are you an experienced expert?
I reckon you'll get half a mill easy. Particularly if you're in the east midlands.
People just can't get enough of that UPVC, £99 insulation and 10 year old kitchens.
Doesn't matter. Judging by the comments on here you have eneough information should be able to give a general idea.
Where is it?
I need advice.
Paid £200,000 in 2002 for detached double glazed 3 bed bungalow, double width drive and garage, close but not too close to all amenities (the going price in the, good, area)
I had a new kitchen (not over the top)
and an en-suite incorporated (not over the top)
and the rear garden landscaped - 150' x 80'
and cavity wall & max loft insulation.
Exterior is maintenance free (UPVC)
'Ball Park' figure pleae from you people who know what is going on?
Mustafa
£1200? I pay £600 on a place apparently "worth" £200k.
Prices are falling that much due to inflation alone. Happy days.
@HTL no probs on the name.....I like it. The world would be boring if we all agreed......
Oh and message for Ros.......
Can we change the Spam question to:-
What will happen to house prices next year?
and Set the answer to "increase"
who knows what will happen to them, but anyone not prepared to tow the line cant comment....
Wise words Chip! I need to remind you that you ow me £1,200 in rent, OK
"You need to give me what I think it'll be worth next year or the year after otherwise I'm not buying."
I might try that in House of Fraser. I want these jeans, but I am not prepared to pay the price on the label, because they will be worth half that in your sale in 4 months time.
Or why not try that with a brand new '12 plate car? "Well, it will be worth £xxx less next year, so I want that price NOW".
Stupid, stupid, stupid.
The hostility is increasing through the roof (without need) and the intelligence of some of the posters who arrive on this site is sinking in the opposite direction.
Well done on 2 fronts Ric. Firstly the abbreviation, even I was getting bored of it. Secondly for accepting that cheaper property is more affordable.
I'm not fussed who's "side" you are on.
Hi Peebee.....I keep writing things on this thread and then deleting them before posting in the fear of becoming rude as one has suggested already.
I know it make the site a little more fun now and again to have the likes of HTL posting but I think Ros needs to change the answer to the "prevent spam" sum ...it would cause a few people problems on here I reckon.
Oddest thing is I get the impression HTL thinks I am on the HPC side on this one.....£7k is easier to save than £10k.......doh, I always thought 7k was more than 10k....come HTL....give up on this.
Spot on. You need to give me what I think it'll be worth next year or the year after otherwise I'm not buying. Transactions AND prices are currently falling because the reductions are too small. Misguided vendors are following the market down, always one step behind and destined never to sell. Ouch.
Why buy this year when odds are that prices will be cheaper next year?
I think clued-up property types call that a death spiral.
Highlight the lies---If peebee says that a cheaper product is not more saleable then that is how it must be.
Just move on and ignore him.
Pigeon economics? Before FBA says it - I didn't know pigeons were that clever ;o)
I can see where HtL is coming from, but he seems to have forgotten that the vendor selling his (not) 70k house has long since taken it off the market because he is now in NegEq thus whilst increasing potential demand, (oh no) reducing potential supply and pushing the prices back up again - doh!
Highlighting non-industry numpties...: You just don't get it, do you. You REALLY don't get it. The fog you refer to is in front of YOUR eyes, not mine. Allow me to enlighten.
Actually, no. Allow YOU to enlighten.
"...no wonder the number of sales is falling year after year."
Sorry - surely it IS a wonder to you? After all, prices are FALLING year on year - so doesn't that make property MORE AFFORDABLE; MORE SALEABLE and therefore MORE should sell, not less?
That means... Oh! - it means that your whole argument is a house of cards. Built upon no foundation; easy to blow down. One huff, one puff... gone. No substance under your fluffed-up feathers. A fabric of...erm...well - LIES, actually!
So - how hot DO you want this kitchen to get, by the way? You keep stoking the fire despite clearly wilting with the heat. You are on a scary ride and you can't get off. Keep going as long as you want. I'm still positively chilly, so keep the coals coming for me, sunshine - I'M LOVING IT!! ;o)
Oh - while you are on, your diction and spelling abilities are as weak as your woeful debating skills.
I think an all-round improvement is required before you play with the big boys and girls...
Oh - and I'm not an Estate Agent, by the way. Sorry to wee on your fizzling firework with that little shocker...
"non-industry numpties"
Hahahahahah. You mean the people you have to sell too? Nothing like knowing your customer base, eh?
Like being an EA is difficult. Hahahahahahaha. Oh this is good stuff. Keep it coming.
One last time before lunch. A cheaper house is more saleable, it has a larger pool of potential buyers because:
1. More people meet the income multiple criteria
2. The deposit is easier to save.
With your foggy analysis no wonder the number of sales is falling year after year.
Ric: Hi mate! ;o)
Unfortunately, our intellectually-challenged sparring partner is not even highlighting the obvious.
1. The direct comparison between cheapness and affordability of homes (or anything else for that matter...) only work when ability to purchase increases as the home becomes cheaper. The poster has offered no proof that this is the case - nor can he/she/prefer-not-to-disclose do so.
2. A cheaper product is ONLY less expensive - not more affordable... and therefore not more saleable.
3. A prospective buyer without the necessary resource -or intention - to proceed is only a window-shopper.
The sooner that non-industry numpties stop trying to use pigeon economics, charts and graphs, and manipulated statistics to tell us when we will or won't sell, and how much less we need to offer it for sale at in order to sell it, the better.
In the meantime, selling goes on under their noses at a rate of OVER 2500 HOUSES PER DAY - and they look more ridiculous by the day.
You gotta admire their tenacity though... ;o)
Reading highlight the lies (who clearly has no idea of how the property market works) reminds me of that recent interview with Ed Milliband where no matter what he is asked, he just responds with the same answer which has no relevance to the question what so ever.
What an idiot.
@Ric
Then please explain it to PeeBee for me. Oh and Tony (it won't matter whether the seller is asking £200K or £180K) and Fun Boy Agent (if you can't afford a £100,000 house, you probably can't afford a £90,000, £80,000 or £70,000 house) while you're at it.
It concerns me that some of your collegues are so dense.
Highlighting idiocy to the world...:
Have you read what you write? I mean REALLY read?
Tell me you don't have a job where decisions are required to be made, pleeeease!
@Highlight the obvious! sorry lies.
So cheaper things are more affordable than expensive things........I am so glad you keep pointing this out to us slightly dim folk out here.
You thought of running the country! You could teach people that you are more likely to burn yourself touching a naked flame than a flip flop.
@PeeBee
So what? It means there are more prospective buyers of course. As I said before "clearly many times more people can afford the house at 70 grand".
Anyway you’re getting bogged down arguing the toss over detail and making a fool of yourself. As I said 10% and 4 times earnings was an example. Call it 20, 25, 50%, 2 times, 3 times, 5 times, it doesn’t matter, the principle is still the same. In fact forget about houses, FTB’s, all of it. The shock news is that, wait for it…….
Expensive things are less affordable than cheap things.
Crash Bandicoot: "Have any of you flat earthers checked out todays Daily Telegraph?
"Market crash could hit within weeks" "
Thanks. I missed that Telegraph headline today.
I also missed it last year.
And the year before.
And 2008.
And '07... 06... 05... 04... 03... Get the picture?
Oh - I LOVE my flat earth, thank you. I can see FOREVER - you have a finite range of only a few miles... ;o)
Highlighting your own lies and inadequecies...: "A quick look at any chart of UK income distribution will show you that a shedload more people earn £15k and over than earn £22k and over."
SO?? That means diddly squat when it comes to prospective buyers, which is your poorly presented and thought-out point.
There are a raft of sub-£70k properties out there for sale - so how come they are not all sold? Your supposed argument crumbles before your very eyes. Rather than invent a new one, I will simply redirect your question to me back to you:
"Is your IQ so low that you really need that explaining to you?"
You don't want to go down the duelling IQs route with me, mate. Trust me - you will lose.
Feeling warmer yet? Kitchen getting hotter... you're positively glowing.
I'm shivering! Someone turn up the heat, please ;o)
Have any of you flat earthers checked out todays Daily Telegraph?
"Market crash could hit within weeks"
"The problem is a shortage of liquidity – that is what is causing the problems with the banks. It feels exactly as it felt in 2008," said one senior London-based bank executive.
"I think we are heading for a market shock in September or October that will match anything we have ever seen before," said a senior credit banker at a major European bank.
Good luck waiting for improved lending. Wake up people it's not going to happen. There is no money. All we have is a massive overhang of debt.
@PeeBee
A quick look at any chart of UK income distribution will show you that a shedload more people earn £15k and over than earn £22k and over. Is your IQ so low that you really need that explaining to you?
If they ain't saving then they ain't prospective FTB's are they? I don't follow your point.
Those who are saving will obviously find it easier to accumulate the required percentage of a £70k house than the same percentage of a £100k house. Because its, like, less money and that.
To try and argue that a £100k house is as affordable as a £70k house is just plain ridiculous. Some would say deluded.
Highlight the lies: From your posts -
"Of course people who can't afford a 100 grand house can afford a 70 grand one. Loads more people."
"Clearly many times more people can afford the house at 70 grand."
Think so? Or simply ASSUME so? Where are your hard facts - the "evidence" you demand in an earlier post which you state differentiates truth from lie?
What about deposits? If they haven't got the deposit, then they can't buy - simple as.
A recent survey showed that ONLY FOURTEEN PERCENT of prospective FTBs were saving for a deposit. The story was highlighted here on EAT.
If they ain't got the 10% deposit (and that is assuming that they could get a 90% mortgage - again you assume without hard fact to back you up...) then they ain't on the ladder.
Sorry for Highlighting YOUR lies, sunshine - but this kitchen is really hot and you ain't got the nous to stand the heat... ;o)
Fun boy agent like house prices rents can't go up for ever, there is a ceiling. The more inflated they get the more it looks like a bubble and you know what happens to bubbles, they eventually go pop. There is an increasing amount of economical fundamentals which will push both house prices and rents down.
You seem to be living in the clouds rather than reality.
@FBA
That's a 6% gross yield. Pretty crap really considering the value is reducing by 5% per year due to inflation. Then you add in maintenance etc etc and it starts to look like a p*ss poor financial decision.
It highlights the fact that many of these stubborn, boomer, accidental landlords don't know what they are doing.
Even if the nominal value improves in 5 years time (which I doubt) the vendor will have lost a packet. Far better to get the £200k and invest it in assets that aren't hugely over-valued.
Cheers
FBA - I have to admit i see that too...... but i believe rents will outstrip affordability before prices start going up and will have to adjust. How long can these BTL people leave a property empty???
Rents are reaching the upper limit of affordability for most already
A real and perfect example of a BTL Vendors view at my agency this week.
V purchased 1 bed flat 2005 for £175k. Current tenancy ends Aug 2011. £850pcm.
I had a chat with the V about selling, I suggested a price to achieve of £200k would be good. We went on the market at £215k in early Aug. We received an offer of £203k after 2 weeks. The only offer from just 2 viewings (no other interest, poor hit rate RM). V declined. I got the buyer up to offer stage £205k. Not enough said the V. I put the case as best I could that it was a very generous offer from a genuine cash buyer. Buyer would not budge from £205k, V wanted £210. I was frustrated in every respect by the attitude of the V.
V/Landlord called me early this week to enquire about further interest, I explained there was none. "OK, offer it as a let at £1000pcm" was the reply.
We let it within 24 hours for £975pcm.
To all HPCers.. Why would this V need to take a price drop? This V (and others like her) can and will hike the rent figures and rent their property to someone in your position (renting not buying) on a scarce letting market and wait for the sales market to improve. Some V's will become "accidental Landlords" as they release equity through BTL rather than selling. In other words, most V's will wait or use this market to their advantage, but be assured, those doing it are doing it NOW!
As rents increase year on year (which they will if the sales market remains stagnated) and holding deposits and advanced rents become greater, in the end, buying will sooner or later, look most attractive.
In my opinion (its only an opinion) 95% LTV with sensible int rates would stimulate an exodus from rentals to buying, thus stimulating the bottom of the market allowing the middle and top markets to complete chains. This would effectively stiffen sales asking prices, or indeed, increase them as demand rises, thus protecting the banks risks.
Again, its only my opinion, but, if there are people out there looking for the absolute lowest point that property sales asking prices can level to, I would suggest we are close to it if not on it now. There will always be the odd one or two forced to sell at bargain basement prices, but this will not be the norm. Most V will wait the market out.
There are many other factors that will influence demand, but if I were an HPCer I would keep a close eye on any bank (the first bank) to offer 95% and another close eye on rental values increasing beyond most peoples realistic means and expectations to spot the point where the sales market can't help but stiffen.
I might be wrong, it may be two years hence, but it doesn't feel that way in my office.
When I talk to the 20 prospective tenants who register for every single overpriced rental flat or house we put on the lettings market (and is gone in 24 hours) I find the only reason they don't buy is the deposit situation.
If any one bank changes policy to offer such a product a few things will happen.
The house price crash dream will be gone
That bank will scoop all the new mortgage business
Prices will stiffen
The sales market will become stimulated
The British economy will improve in all areas (inc Tax)
It is only my opinion.... but !! In the example I gave, as an EA, I made money anyway... so
ooompah, ooompah, stick that up your Joompah !
Sorry for the late reply ACB busy bee and all that!
Rude? hardly, just pointing out the obvious.
Buyers to me are vendors one day, any of my vendors will confirm I often say, my opinion and that of my vendor the moment after their for sale sign goes up is irrelevant -
It is without question what the buyer thinks about the house and price that matters the most - after all the vendor will not be buying the house nor will I, so I encourage buyer opinion always and as I have on this site many times, FTBDan and Brit would hopefully confirm I often say, I would happily lend a hand to any house hunter and always encourage they offer what they think a property is worth. (after all a "no we wont accept has never hurt anyone)
You say EA's are rude and you have loads of cash but do not want to buy, so how can you defend yourself against me saying your not a buyer and how does that make me rude.
You perhaps think agents are rude as they do not call you about houses? or when you walk in their office to ask for details, your answer to their question of how soon are you looking to move is 10 years time and this raises an eyebrow....
it certainly would with me, considered rude or not you are a waste of time to estate agents if you do not want to move, they should not be rude granted but why would you be talking to agents if you have no intention of moving?....Anyone of my vendors would wave you away if you said I was rude to you as a " potential buyer" given you then tell them you want prices to drop 50% and your still not going to buy then.......
Now again I am not being rude to you, I dont know you, but I am saying you CAN NOT say EA's are rude without perhaps good reason and that means give me the example! Out of interest, where do prices need to be to be "correct" in your mind and when they are there, Will you buy? and once purchased, What do you want prices to do then?
Look forward to hearing you comments!
@PeeBee
You have a point but I still think the main thrust is interesting. You could argue that there are 10,000 less or whatever because 10,000 more Probate claims have been made and no-one has come forward to keep up the number of owner occupiers.
But then that would still be the same overall effect - whether buyers/owners are living in the properties or not there are a lot less of them.
I'm still astonished there is only one posting on the other non story - and at the content of that too. So all lettings agents, or more correctly Landlords, are modern day slave masters then? (which reminds me Seb Coe is on Who Do You Think You Are tonight)
Now where's the ladder for the loft to get the cases down!!
Au revoir
As an example. Say you can borrow 4 times income and need a 10% deposit.
Salary required for 100 grand house = £22.5k
Salary required for 70 grand house = £15.75k
Clearly many times more people can afford the house at 70 grand.
Jeez, this stuff isn't complicated.
You and I both agree that affordabilty needs to improve.
This can happen in 2 ways:
1. Buyers have more money to spend.
2. Prices come down.
Of course people who can't afford a 100 grand house can afford a 70 grand one. Loads more people.
What a strange idea that they can't.
@Highlight the lies, except price reductions will not make a difference!!!
As Tony pointed out in one of the first posts which you have probabably chose to ignore because it actually contains a logical argument, if you can't afford a £100,000 house, you probably can't afford a £90,000, £80,000 or £70,000 house.
How low do you think they will go down????
Rather than just simply harping on about "price reduction", please state just how far you expect prices to drop so. If you're not going to say, please don't respond.
@Highlight the lies, except price reductions will not make a difference!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
As Tony pointed out in one of the first posts which you have probabably chose to ignore because it actually contains a logical argument, if you can't afford a £100,000 house, you probably can't afford a £90,000, £80,000 or £70,000 house.
How low do you think they will go down????
Rather than just simply harping on about "price reduction", please state just how far you expect prices to drop so. If you're not going to say, please don't respond.
@Highlight the lies, except price reductions will not make a difference!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
As Tony pointed out in one of the first posts which you have probabably chose to ignore because it actually contains a logical argument, if you can't afford a £100,000 house, you probably can't afford a £90,000, £80,000 or £70,000 house.
How low do you think they will go down????
Rather than just simply harping on about "price reduction", please state just how far you expect prices to drop so. If you're not going to say, please don't respond.
Where does this idea that FTB's have small deposits and investors have large deposits come from? Read some of the postings below. You might sell more houses if you knew who you were selling them too. The average FTB is what? 38? These guys have large deposits too.
Another cash buyer on 2011-08-24 15:28:32
Please keep up, before spreading your negativity.
If prices were to hypotehtically go down to 3.5 x salary overnight (like some of these dreamers feel they are entitled to), yes, demand would be high, for the very minute, few properties that did actually remain on the market.
ACB - Ric is NOT and has not been rude. He has made an accurate observation, that you sir, are not a buyer - at present, of course.
"The fact is that nothing is going to improve until people earn more money and have bigger deposits or lendors are allowed to become more leniant"
That's a FACT is it? Really? Not just wishfull thinking?
So people just need more money, eh? Don't hold your breath. With inflation at 5%, affordability is getting worse every day. Even the Government realise that property prices are unrealistic.
Of course, the other, realistic solution would be lower prices. Cos then, like, stagnant wages, banks not lending and large deposits wouldn't be an issue.
FBA - i agree with your point on rents increasing they are and will continue to over the next 2 years. I see more rent defaults than mortagage defaults on the horzon. Then times will get......horrible for everyone!
I think AoS is spot on, as prices fall further there will be an increase in B2L activity (and other buyer types) as yields increase, meaning prices will ultimately stabilise, due to a reduction of stock levels both from an increased number of neg eq owner/occupiers not selling and an increase in transaction numbers.
We are seeing just this at the moment with a couple of "below market value" reposessions that we are selling. There are FTBs and regular buyers with chains interested but they are being pushed out by investors who have large deposits (or are all cash) and can move quickly without having to raise large LTV mortgages, sort out chain issues or serve notice periods on ASTs.
So lets assume that all these so called "ftb's" wait until the market hits the bottom (which is going to be impossible to know until after it has happened):
1) How are you going to know when the market has hit rock bottom.
2) If you all decide to buy the same time, there is going to be more demand for property which is going to push the price back up?
The thing is, if you want to buy a house and you can afford it, buy it. If you can't don't but don't expect huge reductions in prices.
It also does not claim what you have suggested. It refers to the lowest number of OWNER-OCCUPIERS, not homeowners. If you were to add the number of homes which are owned by private landlords, including 'accidentals' - then the figures would be completely different, do you not think?
If a landlord owns 10 properties,it counts as
only one homeowner.
Counting it as 10, as you suggest will, obviouslly give a completely different figure.
@ grl, business must be booming, double 0 is still 0??
@Highlight the lies, OK how about prices are at the lowest they have been for four years, and so are transactions.
Please provide the proof that house price drops will lead to more transactions. There isn't any. The fact is that nothing is going to improve until people earn more money and have bigger deposits or lendors are allowed to become more leniant.
Please do not provide another non sensical statement where you are not willing to take into account anything that goes against your ridiculous fantasy.
The fact is, I don't care if house prices go up or down, neither does any other estate agent. We want to sell them for the best price possible. And since we are in a much better position to comment on the housing industry than most of these "price reduce" warriors, I would suggest that you look at other factors that effect the market.
My lettings Partner is advising his clients (Landlords) that at renewal he can achieve 16% to 20% rent increases on AST that end currently, due to high demand as peolpe can't raise deposits for mortgages.
How many 20% annual hikes would a HPCer take before they viewed it as not so good to rent and better to buy?
Paul--- It must also be taken into account that our sales business last year was non existant as we were solely focussing on the lettings side, so this will go a long way to explain why we have done more sales business this year, in fact double!
Sold 0 last year,but double that this year.
"prices may fall more but it will not lead to an increase in transactions"
This is a lie which is why you provide no "past evidence" to back it up.
All Cash Buyer, if by your comment about agents being rude to buyers, you are referring to the posters who refer to themselves as FTB's but are actually never going to, you are sadly mistaken.
They are not first time buyers because they are never going to buy, they are going to stay living with their mummy and daddy and use "but house prices are going to fall" as an excuse for the rest of their life.
As Tony has already pointed out in a much earlier post, a reduction in house prices is not going to make a difference to the housing market unless they are reduced by epic proportions (which is what almost every FTB that posts on this website expects because their "in the know" buddys tell them on HPC), which is completely unrealisitc and is never going to happen.
Yet they seem to dismiss all facts and past evidence. Yes prices may fall more but it will not lead to an increase in transactions and it will not be to the to the proportions that the HPC idiots keep going on about.
Industry Observer: "May I ask why no-one has posted on the last story today about the lowest number of home owners this century?"
Possibly because it is even more of a non-story than this one! ;o)
It also does not claim what you have suggested. It refers to the lowest number of OWNER-OCCUPIERS, not homeowners. If you were to add the number of homes which are owned by private landlords, including 'accidentals' - then the figures would be completely different, do you not think?
Have a good holiday, mon ami! ;o)
All Cash Buyer.
Could I just point out that the people the EA's you suggest are being rude to are not buyers at all. Nor sir are you. Like you say a couple of years time maybe.
Off onholiday now so one last post as it were.
Am I the only one truly astonished at the number of postings for this story which says nothing, is all about extremely marginal figures and takes none of the various house price arguments or theories any further in any direction.
May I ask why no-one has posted on the last story today about the lowest number of home owners this century?
Don't any of you see links here - if home ownership numbers and %ages fall then presumably so do sales volumes and EAs incomes?
Hey ho will send you a postcard
No rush to buy at the moment. Just enjoying the price falls, just think how much prices will fall in the future.
After all there is no prospect of house price rises in these poor economic conditions.
@ Ric.
Are you trying to be rude?
Or does it just come naturally?
How do you manage to judge me on the basis of two posts?
Your dismissive attitude can't be much help when it comes to sales.
ACB
RIc - If buyers buy - is there any need for sellers? do agents sell? your point is too simplistic to be relevent......
Thanks All Cash Buyer
I am not entirely sure Agents are rude to people who want to buy......you must have a very specific reason to think that, its typically sellers moan at agents for not selling, rather than buyers for not buying......but then your opinion is your opinion, so sorry to hear it.
Might go down hill from here........You call yourself a "All cash buyer" though and not to sound rude (as you may think) but your not actually a buyer! You say "Happy to wait, lower prices, enjoy life".
Buyers buy? do they not?........you seem to be commenting so perhaps you should name yourself All cash Opinion.
Some of my friends have been saving for years, got bored, and got mortgages recently. I'm not convinced this is a 'dip' cos folk's wages and savings aren't growing. So I'm waiting for more falls, and who knows, maybe banks will lend more in the future?
I'm just not seeing any good reason NOT to wait a few years more.
Open to reasons to buy though. Either my friends are all wrong, or i'm wrong - and I'm outnumbered :S
So come on Ace of Spades, I'm struggling to understand your position.
You say that if prices fall there'll be "massive demand" you also rightly accept that prices have fallen. My question is, where's the massive demand at? when does it come? Transactions are 10% down on last year. All we hear is that buyers are scarce, we need loose finance etc etc. Is this the "boomer doublespeak" that you have a reputation for?
@ Ric,
I'm not a FTB, but an All Cash Buyer, that's my cash, hard earned!
It amazes me that an industry based on sales, is so rude and contemptuous towards those to whom they wish to sell!
Seems very counter-productive, cutting off your nose to spite your face as my old Gran used to say.
Examples? Too many to mention, with some it seems to be an ingrained habit.
The same attitude is prevalent on this site.
Many EAs seem unable to comprehend the buyers point of view, which to me would seem to be a distinct disadvantage if you wish to sell.
ACB
@Aos
OK, more guesses, care in the community? keeping warm in the library?
"There won't be more sales. More people than ever will be in negative equity who physically can't sell or sensibly won't - why on earth would they?"
Have you looked over the pond?
There is no IF.
For what it's worth my rental costs while I wait for prices to fall further are the same as the interest if I was to take out a mortgage. And the place I rent is much nicer than the places I could afford to buy and the landlord is a lovely bloke too. Do the maths.
The main reason the rentals market is quite strong at the moment is because people like me don't want to buy at inflated prices and have no incentive to buy now when everyone knows prices are currently falling and won't rise for quite some time.
Peebee - Maybe he lives at home with his parents and pays no rent perhaps that 50% deposit will be a cash buy? you never know!!!!
There won't be more sales. More people than ever will be in negative equity who physically can't sell or sensibly won't - why on earth would they? Stock would crumble, leaving slim pickings.
But for the dirt cheap property that does remain on the market, this would create fierce competition amongst the existing and brand new buying markets - pushing FTB's to the outside (who HPC base a strong argument around).
Yes, Chip, exactly right again (please, please, PLEASE note the sarcasm). Make up another scenario, you might get lucky and get the next one right?
"Common sense tells me that prices can never fall. NEVER do you hear me. NEVER."
Well, they already have. They probably will fall a little further.
I love the way you have assumed and lied through your whole 'debate' to give you some sort of argument against my points and situation.
This used to be a credible site. The likes of you have changed that somewhat.
Balls to UK property. It currently represents appalling value for money. I'm sitting on my funds for now and am happily watching them grow whilst prices fall. Although I did get tempted to load up on cheap shares recently. Maybe a mistake, I wouldn't be surprised to see the FTSE dip below 4000 once the German courts finally blow the Eurozone bailouts out of the water.
Anyway, I digress. UK property is hugely over-priced. End of.
@All Cash Buyer
What experience have you had where EA's have not been polite to FTB's?
east-yorks-guy: "So if I buy what is now a £200k house for 160k in two years time I'll have saved £80k."
Yup - IF you have spent NO MONEY whatsoever on living accommodation in the period, that is...
And IF your Uncle grows funbags and starts calling himself Katie you'll have a new Auntie as well!
You wouldn't think that such a word as small as 'IF' could be so fundamental to an argument - would you?
Guess we'll see you back here in 2 years for an update - on Katie's 'adjustment', that is... ;o)
Happy to wait, for lower prices, saving hundreds of thousands of pounds, whilst enjoying life, no hurry, be happy:))
Shame they don't teach financial savvyness to EAs, or how to be polite to buyers, the inevitable has no choice but to be.
Good Luck to all at EAT and thanks for the laughs!
Check this paper out. The astute reader may notice some apparent similarities to the UK's current situation. After 9 years housing and land prices had fallen by up to 69% in urban areas. Nequity totalled an estimated £7bn in Tokyo alone.
http://www.housingfinance.org/uploads/Publicationsmanager/0009_Jap.pdf
Let hope these price falls continue throughout autumn and Winter then into the next year.
I am also enjoying the increased rate which buy to let portfolios are being repossessed. Buy to let owners are parasites on the whole of society.
AofS - "IF overnight, prices dropped to 3.5 times wages like many HPC's dream, a brand new breed of buyer would be instantly created. Thousands would be looking to buy a second property. Thousands would be looking to add to their portfolios. Thousands of young people would start to look at buying, who are not even considering it at the moment. There would be joint family/friends ventures. Some people buying for their kids. It goes on"
So you are saying there will be more sales?
Do Estate Agents care if the money comes from first time buyers or Investors?
Why do you want higher house prices?
My situation:
I am a ftb with a 50% deposit saved.
There's no way I'm buying yet when prices are dropping unless I see a dream house at a realistic price. Average selling price is now what 10% below asking? And still prices are falling.
Every £1 I save on the purchase price saves me probably a further £1 in interest payments over the mortgage term.
So if I buy what is now a £200k house for 160k in two years time I'll have saved £80k.
I must say that some EA do seem to be slowly lowering asking prices, which is a start but I reckon this autumn and winter's redundancies may help more.
"Common sense tells me that prices can never fall. NEVER do you hear me. NEVER.
I overpayed and so must everybody else for the rest of time. Nothing else is possible"
Love AoS.
Ban HPC'ers - that's the part they've not yet considered!!!!
I also love the fact that I "seem delusional with worry." If I actually do have a BTL portfolio or even a 2nd property to worry about, someone better alert me.
I'm not worried. I have common sense and know that the unrealistic suggestions can be blown out the water. Especially when in many cases deep down, the theory behind these aggressive posts is "gimme cheap 'ouse"
2.5 times salary property FOR ALL!
Chip - give it a rest, unless you have a non-wind up post or something of relevance to say mate :)
Unhappy chappy - "average no of sales per EA are down in everywhere but well done for selling more in London, Have you changed your business model to achieve this?"
We are not spending any money on advertising for sales properties but instead have built up a good rapport with our landlords who have not considered using another agent when deciding to sell and so nearly all of the properties we have taken on have been properties that we have previsouly rented out!
It must also be taken into account that our sales business last year was non existant as we were solely focussing on the lettings side, so this will go a long way to explain why we have done more sales business this year, in fact double!
@AoS
Your reasoning is sounding more desperate by the day.
"lets say prices dropped to the levels you are so desperate to see.......80% of vendors are in negative equity"
Complete rubbish. 3/4 of homeowners don't even have a mortgage.
Next please.
Yes chip, that is exaclty what I am saying (please, please note the sarcasm!).
Don't be so stupid to say if it is not happening in Ireland, USA it won't happen here.
Almost as stupid and as your (wind up - i hope) examples of rational and irrationally thinking.
Mortgage approvals are gradually increasing in the current market.
You are a fool if you cannot see how a mass price slash would create many brand new buying markets that doesn't currently exist. Regardless of how many properties are on the market, which would be few.
The outcome would be the same - no 'affordable' pricing for those in need or FTB's....I did think that was the whole point, right?
Well done.
Unhappy chappy - completely missing the point. FTB's and those who are in need that can't get on the ladder now would have even less of a look-in, making their dream of a cheap property even further away.
HPC'ers, do you read posts or just dictate your opinions regardless?
So lets say prices dropped to the levels you are so desperate to see. Now about 80% of vendors are in negative equity which means they are not going to be able to sell their house anyway.
How is this going to "boost" the market? You are all deluded and so obsessed with price reductions that you cannnot even contemplate other factors. How can you argue with "tony" at the bottom of the page??
@ rantnrave
It is a book by Jim Mize, you should buy a copy
AofE - "IF overnight, prices dropped to 3.5 times wages like many HPC's dream, a brand new breed of buyer would be instantly created" etc
so transactions would go up is what you are saying and more EA's would survive......am i missing the point???
Ater massive falls, I hear the Spanish market is soaring once more and there is no more property available to buy. It's all been snapped up by "canny" investors. Cough, cough.
@AceofSpades
Worried about your BTL? You seem delusional with worry actually.
What you are saying is that if prices fall, nobody sells and they bounce straight back.
Is this happening in Ireland? The US? Did it happen after previous UK corrections?
What a ridiculous point.
That gag looks familiar - I wonder which other website I read it on recently...
To all those waiting for price drops.
Dont worry if prices don't make an immediate drop of 50% or more so that you can enter the market in comfort.
Until the market does what it does, please allow me to recommend Millets.
I heard this will be the winter of their 'discount tents'
Sentiment plays a big part. Prices crashed in the 90s and people didn't pile into property straight after.
The "chink of light" headline has provoked a hasty reaction, which I can appreciate - I felt the same.
Transaction volumes are down, just like many other industries in this economic climate. With 50,000 odd transactions going through per month, we're a long way off the country hitting the panic button to give the HPC the deal of a life time.
One point I have raised in the past, which has never been answered adequately...
IF overnight, prices dropped to 3.5 times wages like many HPC's dream, a brand new breed of buyer would be instantly created.
Thousands would be looking to buy a second property.
Thousands would be looking to add to their portfolios.
Thousands of young people would start to look at buying, who are not even considering it at the moment.
There would be joint family/friends ventures.
Some people buying for their kids.
It goes on...
All categories are not currently looking to buy in this market. But if prices crashed to your dream amounts, you would have a dirt cheap price with a truly massive demand....
What would happen to your prices?
Let's not forget that a lot of property would be pulled off the market as most wouldn't be able to/want to sell at these disney prices.
So, only a selection of property available, at a dirt cheap price with all sorts of buyers banging down the doors. Sounds like your dream HPC scenario hey.
AC - I agree with much of your last post!
"It is RATIONAL that I should want to maximise the amount of money I get from selling my home."
Correct. So not selling it and therefore receiving £0 for it is the definition of irrational.
"It is RATIONAL that they should all try their hardest to win my business."
Not if by try their hardest you mean over-value it, spend time and money with little chance of a sale. That'd be irrational.
@Fun Boy Agent
So, they ran out of cash. Who is still going into space! ;>)
Prices are too high.
No ifs, no buts.
Consider the fact that over the last 100 years, the investment value of property has outstripped every other investment class by a huge margin.
That is an asset bubble, but it has slowly built up to huge proportions.
The reasons are quite complex and include (please don't hate me for saying it) female equality - there are now 2 proper salaries coming in to a household, rather than one or one and a bit.
The problem is not equality, but with the affordability calculations that drove the lending boom.
We have all borrowed WAY too much money (me included) and the solution is to STOP.
Not borrow more.
The world governments are trying gentle price reduction and stagnation together with high inflation to gently pop the house price bubble in the EuroZone.
The US has had a MASSIVE price drop.
But, against everything an HPCer will tell you, they are no better off.
Unfortunately it would appear that we have 20 years of quiet stagnation ahead of us.
@FTB Harry
What do you think the solution is?
What are you looking for and where what price and type of property would tempt you in to the market?
Paul - average no of sales per EA are down in everywhere but well done for selling more in London, Have you changed your business model to achieve this?
Link to the Agents Diary, for those who don't follow it. Echoes and sums up many of the comments being made here:
http://agentsdiary.blogspot.com/2011/08/bad-medicine-tuesday.html
Doom, doom and more doom.
Rational behaviour...
Well...
It is RATIONAL that I should want to maximise the amount of money I get from selling my home.
It is RATIONAL that I should get three estate agents to value my home.
It is RATIONAL that they should all try their hardest to win my business.
It is RATIONAL that I should up my asking price because I expect an offer (after all, I will not be paying asking price for the next one!).
Each individual decision is rational, but in the end we end up with a stalled market.
I valued a flat a couple of days ago, and the owner sat there and said she knew that prices had fallen, that there were no buyers and that deposit requirements were high (that's why she is selling rather than renting it out - she needs the cash to buy the next one).
Then she told me how, having bid the owner down by £10k when sh bought it back in July 2007, she wanted an offer of her asking price, which is £20k more than she paid for it.
She is a very well educated 30 something who is not in fear of her job and wants to move in with her fiancee.
The way she looks at it, this is RATIONAL.
I refused the instruction because it would be a waste of money for me. I would say that is very RATIONAL behaviour for an estate agent.
As Gag Halfront (HHGTTG) once said "It looks like we are both well adjusted in our attitudes today! That'll be 15 million Altarian Dollars..."
I so wish I had done Psychology in university.
@FBA
I think potentially an urban myth but an interesting point nonetheless.
Is the solution to the current malaise:
a. Innovative mortgage products, shared-ownership, negagtive real interest rates, rampant inflation........................... etc. etc.
or b. Lower prices.
There will be change in our industry due to lower transaction levels.
The best agents will survive, but it may take creative thinking for the best to surface.
When Nasa first began sending astronauts into space, they were confronted by a small problem. Their standard ballpoint pens would not work in space. Nasa spent a decade and twelve million dollars designing a pen that would work below three hundred degrees, in space, and work on glass.
The Russians used a pencil & paper.
Chink of light?!
Hahahahahahahahahahahah.
Breath.
Hahahahahahahahahaha.
The market has NEVER been better. Things are buzzing round here!! :-)
Yeah, right. That kind of talk is ridiculous. Unless you are maybe writing in the Mayfair Gazette.
@Hmmm
"The only crisis is in an industry that is still too bloated for the size of the market it serves!"
I agree with you, if you remove the first five words. The number of EA's is shrinking as it has done in the past. All 'industries' do this if in similar current circumstances and a level will emerge. Life goes on.
It looks like this thread has been highjacked by the house price crash brigade!
Im selling more now then I was this time last year, but I am based in central London!
@Tony
By seller I assume that you mean somebody who wants to sell. If so, how is it ever rational to price your house at a level that won't. That would be the definition of irrational.
It doesn't matter anyway. They can sit there like King Canute but people selling around them will be setting the values for the area. Prices will fall whatever thay do.
If you want to move it's best just to get on with it rather than get another house and double your exposure to a falling market. Inflation alone would be wiping out 5% of the value per year from 2 houses rather than 1. Why aquire another depreciating asset?
Most of the comments below smell like desperation to me and probably posted by people with a few too many BTL's. Transaction levels are down another 10% in the last year. EA's seem to have a death wish.
Feel free to wait for lending to "improve" (laughable) or people to save deposits (with stagnant wages, rampant inflation and rising unemployment) but don't hold your breath.
The only thing stifling the market is ridiculous over-pricing and everybody knows it. Even George Osbourne was saying as much a couple of weeks ago.
The volume of the market will only improve when buyers have saved larger deposits - Not likely with the lowest diposable incomes for decades
and mortgage companies offer better terms, - Again not likely with banks having to balance there books better (and quite rightly too)
or if we get another economic crisis couple with high interest rates, leading to more forced sellers. - The most likely of the three but still unlikely over the next 18-24 months
We have a stagnante market.......and in this market EA's are going to have to get creative
Tony, in my opinion you are spot on - "Sellers are being entirely rational. The old saying is that an asset will only sell at a price a buyer is prepared to pay. However in this market it's the price the buyer can *afford* to pay, or is allowed to by the banks. Frankly if buyers need a much higher deposit, say 20%, it won't matter whether the seller is asking £200K or £180K, most buyers will still be unable to afford to buy: the difference in their deposit is only £4000, but the difference in price for the seller is absolutely massive, especially if the houses they want to move to have not dropped in price."
Exactly right, this is what I have been saying consistently along with some of ther other posters such as COTW.
John - well said. Henry Prior seems to be pointing the finger in both directions at once - so, on the one hand, we get the usual old whinge about sellers asking unrealistic prices, while at the same time he acknowledges that there simply aren't enough buyers out there in the first place -- probably irrespective of price. Laughably, he even seems to be holding up 2007 as some sort of golden age - and look where that got us!! Fact is, slowly, painfully, people are starting to realise that the "property ladder" is just a 1980s myth, peddled by an industry anxious to persuade people to move every 5-7 years, whether they actually needed to or not. Maybe what's happening now is that we've finally re-discovered what our parents and grandparents always knew - that if you're lucky enough to be able to afford to own a home, then that's where you stay, raise a family and eventually get carried out feet first. Property crisis? What property crisis? The only crisis is in an industry that is still too bloated for the size of the market it serves!
Sellers are being entirely rational. The old saying is that an asset will only sell at a price a buyer is prepared to pay. However in this market it's the price the buyer can *afford* to pay, or is allowed to by the banks. Frankly if buyers need a much higher deposit, say 20%, it won't matter whether the seller is asking £200K or £180K, most buyers will still be unable to afford to buy: the difference in their deposit is only £4000, but the difference in price for the seller is absolutely massive, especially if the houses they want to move to have not dropped in price.
House prices fall because of forced sellers accepting the hit. However with lower interest rates, people can afford to remain "prisoners", even if a job move means they have to rent out their house and rent at their new location.
The volume of the market will only improve when buyers have saved larger deposits and mortgage companies offer better terms, or if we get another economic crisis couple with high interest rates, leading to more forced sellers.
Do those who remember the slump of the 1990s agree? I wasn't an agent then - all I remember is that it took years and years for volume and prices to recover: I think ti was 11 years before prices reached their 1989 levels in real terms.
"any agent worth there salt should have reduced there overheads by the same proportion "
what are you on?
have you halved your rent,rates, lighting, heating, insurance, etc etc
Another pundit spouting yet another generalisation of the situation. "he can only borrow 75% etc. etc." What!
Spot on John!
Why does every survey have to compare transactions to the boom period it's over it's history we all know transactions have halved but any agent worth there salt should have reduced there overheads by the same proportion these surveys serve no purpose if they continually compare to what was an inflated Market place MOVE ON!