House prices dropped by 0.6% in August, Nationwide has reported.
The lender said house prices now stand at an average of £165,914, a drop of 0.4% over the year.
Nationwide said it expects to see the sluggish market continue.
Robert Gardner, Nationwide’s chief economist, said: “UK house prices declined by 0.6% in August, although this doesn’t change the picture of relative stability that has characterised the market over the past twelve months. Indeed, prices were broadly unchanged compared with August 2010 – just 0.4% lower.
“Sluggish demand for homes, combined with only a gradual rise in the supply of available properties, has helped to keep property prices stable since last summer.
“We expect this trend to be maintained over the remainder of 2011, although downside risks have increased as UK and global growth prospects have weakened.”
Nationwide’s data is based on a sample size of around 4,000 housing transactions. The lender has a market share of about 9%, leading some critics to say that the data does not paint a big enough picture.
However, its house price findings are broadly, and consistently, in line with Halifax and the Land Registry.
Meanwhile, according to boards firm Agency Express, the UK housing market showed signs of life in August.
The firm said it found property activity across the UK for the month surprisingly resilient, with For Sale signs converting to Sold up 3.9% on July. The number of new ‘For Sale’ listings in August was down 1.3% on July as seasonally expected.
However, it said the overall number of properties going over to ‘Sold’ signs was 5.3% down on August 2010 figures.
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Comments
Mines a pint of cider then! :-)
Christopher, in answer to your question, I am not looking to buy anything at the moment as it kind of ties in with Rants question funnily enough. My daughter is currently in her last year of A-levels and I am putting money to one side to help her pay for a degree in London next year. (And the two years afterwards!!)
That's not to say that I wouldn't jump at the chance of a viable bargain if one comes up, as long as my daughter's university fund is sufficiently topped up.
I will finish by saying that I understand your concerns about the economy and your reluctance to accept that BTL is still a viable option, but many investors are buying right now and they clearly don't agree with your concerns. We can't all think the same, all of the time.
Very well Jonnie – if I’m very slightly drunk, then Chris is properly hammered.
Rantnrave – good analogy. Answer: yes, if it’s sensible course, and at a good university, otherwise forget paying the full £27k. The upside doesn’t justify the cost (risk).
I've found it quite an interesting discussion... I've been trying to think of another example to sum up the most recent exchanges. How about this: If you had done well from (a free) university education, would you encourage today's younger folk to do the same, knowing it would cost them at least £27K and interest repayments?
Okay, okay – Chris and Christopher, you sound like a pair of very slightly drunk blokes in a pub gobbing off figures and puffing up your chests about who’s the cleverest so…………………….. Enough lads, enough, sit down lets clam it and have a drink together eh?
You are both wasting your breath and the rest of us think its gone on enough so both of you just leave it.
……………………now, lets talk about something else?
Jonnie
Chris,
I think you’re kidding yourself: you’ve made hay as the property market went hyperbolic at precisely the time you invested, not because you understood the risks, otherwise you wouldn’t have bought in 2007. Cashing in 2007 would’ve been perfect – I don’t think you would question this. Nothing to stop you re-entering the market at today’s lower prices.
Also, I couldn't really care less about your age, educational background, fortune when picking those 6 magic numbers in the queue in Tesco on Saturday evenings or the wealth of any dead relatives, but what I struggle with is you claiming that this is a good time to enter the BTL market. The UK economy is struggling, property prices are still toppy given the long bull market and there is huge pressure on jobs and disposable (real) income. To think otherwise is somewhat odd…. although talking up your book is an age old sign of people worried about their own position.
BTL is not a good investment to enter today. It was in the past and it will be again in the future. If you fully appreciated the risks of such investments then you cannot reach a different conclusion.
For the record, rental yields in my area are sub 4% - these would qualify as good, lower risk properties. Higher rental yields could be achieved, but I wouldn’t want to touch such properties with a barge pole. When the “good” properties are yielding returns north of 7-8% then I will be interested. Also, comparing these yields to bank interest rates is a further sign that you haven’t fully understood “risk”.
Do you practise what you preach? Are you still buying? :-)
I was unlucky that the market went bad after I bought, but because I bought sound properties in good areas for the right prices, I have always been fine. I own 4-BTL properties and they were all well considered investments and none of them have been empty for more than a few weeks in between tenants and that goes right back to 1991 when I bought the first one.
What I need to say is that there are tons of cheap properties out there that make excellent BTL investments. Just had a quick look and straight away I have spotted a 2-bed apartment being sold near one of my properties for offers over £69,995. It has a rental pottential of £430 p/m. It is ex-council so also has low management & service charges. (Around £200 a year) That's a yield of 7.37%.
I'm not saying that someone should try to find this property and buy it, but without any serious searching, I can lay my hands on BTL investment opportunities that have strong yields.
Back in 2006 & 2007, BTL investors were happy with yields above 5%. Now people on here are turning their noses up at yields less than 7 or 8%. Crazy.
We are turning into a nation of people happy/ content/ have no other choice but to rent property. Fine, we can see into the future, so smart people with savings should in my opinion, seize the opportunity and buy a BTL property while interest rates are still low, house prices are cheap and deals can be done.
Put it this way, when the house prices start going up again and they will do one day, vendors will be less likely to take a hit on their sale price, so if people follow the market, they will not do that well, whereas if they get ahead of the market and buy while everyone else is staying away, significant gains can be made.
A very wealthy stock broker was talking on CNN last week. He said when everyone else starts dumping stock in a big way, he gives it half a day and then starts buying it up big style at low prices! Okay, I'm sure he knows which stock to touch and which stock to avoid, but hey.
Hmm....... Follow the crowd or take a few risks.
I am only 45-years old, I only have O-levels (GCSE's), have never won or inherited any money, yet II will be retiring before I am 50-years old. That's because I take calculated risks all the time. I don't rely on luck because there is always a safety margin built-in to everything I have done. When I bought my first house in 1991, I put £1500 into a Tessa savings account as my safety net should my house stand empty between tenants. My mortgage at the time was just over £300 p/m. This would give me around 5-months to find another tenant before having to panic. Because I bought in a good area, that partricular house has never stood empty for more than a week (To this day!) and even that was our choice because we needed to redecorate it. New tenants were always lined up before the old tenants had left.
Stick your heads in the sand if you want to, but property has always been a good investment. It's like anything though, you need to choose the right property, in the right area for the right price. :-)
A lot has been made recently re the potential yield of BTL vs what can be gained in the bank. The prevailing thought is that the banks are handing out interest at 0.5% or worse. Just as mortgage rates are much higher than 0.5%, that's far from the truth though.
You can get instant access accounts with unlimited penalty-free withdrawals that offer north of 3%. If you're prepared to lock the money away for an extended period, returns of 4 or 5% are out there. Yes, that's below the rate of inflation (not if you remove the VAT rise though!), but houses on the whole aren't showing above inflation rises either.
I'm not saying in any way that Chris has the wrong idea. He's clearly thought through his plans and is in it for the long-term. I doubt he's typical of many other BTL landlords though, who don't necessarily factor in all the costs involved (insurance, maintenance, void periods etc) when doing their sums. My point is that many of those type of BTLers might get a similar return on their investment for a lot less hassle by looking at savings again.
Chris,
People do always need a place to live, but not necessarily their own place, or indeed a place to live in the area where a BTL investor buys their property(ies). Diversification can help with the latter, but only really at scale is this achieved.
Moreover, property prices and rent are actually highly correlated in the medium to long term - unfortunately, they're not good diversifiers.
I acknowledge that on the whole you seem to have bought well in the past (not so much in 2007, but it's difficult/impossible to get every investment right). However, the evidence you provide is not proof that current BTL risks are small. The risks that BTL investors today should be concerned with are those that are yet to occur - they should ensure there's enough fat in the initial pricing to allow for some mishaps along the way.
Furthermore, since 1991 the country experienced unprecedented levels of wage inflation, house price inflation and inward migration. I strongly suspect that we're unlikely to experience a comparable set of events over the next twenty years. In light of this, plus the other investment risks, from my perspective only rental yields north of 7-8% make such a long-term punt justifiable at this moment in time. Anything lower then I would rather keep my powder dry and stick with lower risk, and indeed lower yielding, but more liquid investments in the short-term, and wait for a correction in asset prices whether that's property or other assets.
@ grl "You claim that your profit is £250-£275 per month,in the example you gave for one of your 2007 properties the profit was £275.
But previously you said that the profits from both 2007 properties was £700."
The reason I didn't do into detail was that the other property was bought on a residential mortgage in my name only following a separation with my wife!!! The deposit was tiny and it was on a capped mortgage rate, which fell to virtually nothing 2 or 3-years ago. When we got back together I asked the lender if I could rent the house out as it was worth less than I paid for it. They have agreed to allow this for 2-years and a maximum 1-year extension. Next year I will have to remortgage it onto a BTL, though I will probably just pay it off completely. This property is renting for about £500 a month and is almost all profit because my interest rate is about 0.75%.
I never gave the details of this property because it didn't reinforce the message, which are that BTL properties were viable. The other property was a pure BTL investment. I do not tell lies and I really did only pay around £18k that Autumn to buy two properties, though they weren't both on BTL mortgages. Thanks for asking me to share more of my private life. I will now close off discussions with you & others on this subject, surfice to say that BTL works if you are careful what you buy.
I have shown that £103k properties can achieve rents of up to £625 per month, which is a yield of over 6%, 2 or 3-times what the banks are handing out in interest these days and ultimately the house would be paid off by the tenants, so a free house eventually. How can this be a bad idea?
"you're a brave sole to double-up; your income and now your savings are tied to the same asset class. You clearly don't believe in diversification. Good luck to you."
Christopher, I see sales and lettings as diversification enough. When property values go up, less people want to rent and visa versa.
People always need somewhere to live, so property will always be popular, unless of course the population falls, which it's not at the minute.
In the mid 90's when I got into BTL, detached 3-bed properties were selling in this area for around £50k, and were renting at £350 p/m. Now they are selling for around £130k and are renting for £700 p/m.
I once bought a small 3-bed detached in 1991 and still own it today. There is only £56k of mortgage left on it (I once re-mortgaged it), which costs me £279 p/m. (5.99%APR) Even if rents halved, I am still covering my mortgage, so the risks are not that great.
As for our business, we are still selling property even in these slow times and making a healthy profit, so should the market improve, things will get even better.
The income from the BTL's will cover the mortgages even if 50% of them are unocupied, so I can forget about the BTL's and just concentrate on the business side.
I accept that there are worse places to buy a BTL, but BTL investors are still out there buying right now, as I type this, so it is clearly still viable. Even a yield of 4% is nearly double what you can earn in the bank!!
I googled HPC and soon found out what the letters stood for.
Before opening the link,I was expecting loads of threads titled "Just bought a house for 40% less than previous owners paid"
But it's nothing like that. It covers a wide range of topics and I found it very informative. Very little,in fact,about house prices.
Probably will not return,because I don't need constant reminders that this country (amongst others) is in deep
trouble,and things are not likely to get much better for many years.
It seems that on here,accusing someone of being from HPC is nothing more than a pathetic attempt to play the man and not the ball.
The fact that it's a tactic often used by PeeBee (even before his recent breakdown) is more than enough to
prove that point.
Chris---
One day you claim you paid £7.5K deposit on each of your 2007 properties.
In the figures provided for one of your 2007 properties you claim that the deposit was £18,300.
"The only thing I haven't mentioned until now, is that while I bought two properties in 2007 (One of which I have given figures for already)"
-----------------------------------------------------------------------------
You claim that your profit is £250-£275 per month,in the example you gave for one of your 2007 properties the profit was £275.
But previously you said that the profits from both 2007 properties was £700.
-----------------------------------------------------------------------------
You originally said "If I was a clever man, rather than spend the £700 a month profit, I would make over-payments and pay off the original debt."
A few days later you said "Then what I do is put the difference between what I am given in rents and what I need to pay on the mortgages into a savings account. Each year, when I am able to pay some of the loan off without incurring a penalty, I pay off some of the loan with this money."
----------------------------------------------------------------------------
Keep digging
@ Christopher
That's because I'm filthy RICH !
@bud
Just what is 'absolute rubbish' - just part or all of it?
One thing is certain - the constituant parts of a new build, including legislation costs, continue to rise as with everything. Supply & demand will eventually kick in, probably within a year or two. There is already a general national shortage of residential property, read the reports. The lack of sales is temporary, the demand is still there. At the moment the mortgage providers are the main problem and of course they themselves have problems. I am not saying 125% loans on 6 times wages but reasonable interest rates for those with good references, only a 10/15% deposit and without extortionate 'arrangement' fees.
It's my view, of course I could be wrong - but then so could others!
Chris,
BTL seems to work for you as you appear to be sitting on a larger enough cash pile to deal with the risks relating to such an investment, namely a hike in interest rates, less than 100% occupancy, maintenance, an increase in agency fees and unknown unknowns.
Without such a large cash buffer then BTL investment is still marginal at best. Also, you neglect to recognise the opportunity cost of keeping a large cash buffer.
Also, you're doing a grand job getting such a high rent on a £103k property - that's considerably more than anything in my area, where it's more like 4%.
Furthermore, you're a brave sole to double-up; your income and now your savings are tied to the same asset class. You clearly don't believe in diversification. Good luck to you.
There are newbuilds round my way that remain unsold three years after they were completed. Others that have been on the market for two years have not had a single reduction in price and just sit there empty. Building more of the things and asking even more for them isn't going to make much difference.
@Raymondo
Absolute rubbish. The price of newbuilds wont rise if people cant borrow the money to buy them. Developers will just have less money to pay for land. Land prices will fall.
Well worth repeating - +.....
The cost of everything single thing that constitutes a residential property is rising quickly and that will be reflected more in the price of new builds fairly soon - next year? Second hand property will then stabilse and then slowly rise in line. Those that can afford to buy will buy, those that cannot will not.
So, those who are not forced to sell now should just pay off more of their mortgage while rates are low and wait a year or two.
That is my view and it is just as valid as that the hysterical HPCers.
@PeeBee
Get a grip mate. No conspiracy to manufacture "added impact" here. Do these thoughts really go through your head? Maybe it's time to slip that tin foil helmet back on?
Anyway, back to the point. So Michael Robson is advocating price reductions just for the hell of it? Nah. It's beacause they're too high. Everybody knows it. Even you deep down.
@George
"Just wondered what property you have that's apparently worth £103K in a god location, modern 2 bed, freehold and yields £625 a month. Is that abroad, or are you a social landlord?"
George, here is another similar property to mine:
http://www.rightmove.co.uk/property-to-rent/property-31270831.html
Check Zoopla prices: http://www.zoopla.co.uk/house-prices/orton-wistow/linnet/pe2-6xy/?q=PE2%206XY
You will see that they change hands between £96k & £110k.
@ Grl
"If you were truelly clever man you'd remember the lies you've already told.
Out of intrest-- What makes a person come on a totally
anonymous forum and give a load of bullsh*t.
Have you nothing better to do with your life? "
Sometimes it takes people like me to stand up to doom mongers like you who do nothing else but come onto a professional industry website like this, just to moan about house prices. I am not anonymous BTW. I am a trading estate agent working in the East Midlands and known to a number of other professionals already using this site for years. I use this site to keep up with developments in the industry, so what's your excuse? I also happen to be off work today, though I have been behind the PC working on our VAT return and PAYE figures.
What you might call bullsh*t is actually fact. Walk into ANY financial mortgage advisors office and ask if it is possible to buy a property, rent it out and make a profit and they will tell you it is possible, so why doubt me.
The only thing I haven't mentioned until now, is that while I bought two properties in 2007 (One of which I have given figures for already) they were both very good value for money at the time because of where they were located. In one of the best areas around. Sometimes being an estate agent has its perks. Knowing the values of property and being able to spot the bargains early. :-)
Now off you go back to HPC and stop banging on about things you have no knowledge of.
"Different day and totally different facts and figures."
I only gave the figures of one of the properties in my break down, so how can you say that?
You are clearly running out of arguments to contest my points, so now you are looking for inconsistancies in my previous data, that were originally given roughly to make a point, not specifically as was requested later. This is why people don't normally give the data on sites like these, because people like you try to break them down to dismiss them. I know who is sad and it is people like yourself unable to win a debate without getting personal. If you don't want to benefit from people's real life experiences, good or bad then please leave this site and hang out with the rest of the doom mongers on HPC.
Oh and would the immature idiot that keeps pretending to me, go back to playing with your Xbox or DS and leave the adults to talk amongst ourselves, there's a good lad. :-)
grl, it is a paper loss sure, but you also will have to pay back twice on average over 25 years of what you borrowed at the peak as well, so when prices fall further, you will still have a bigger paper loss, only realised when or if you need to sell of corse ! it could be 20 years until prices reach those hights again ! with the double dip coming back to bite us.
If you were truelly clever man you'd remember the lies you've already told.
Out of intrest-- What makes a person come on a totally
anonymous forum and give a load of bullsh*t.
Have you nothing better to do with your life?
Chris on 2011-08-23 20:57:52
I bought two BTL propeties in September 2007, about the highest point of the inflated bubble as was humanly possible and on paper I have lost thousands, but in reality I have lost nothing, zero, ziltch, nothing. Both these properties are in very popular area's and my rents have been rising and I am making a healthy profit (Nearly £700 a month) yet I only put down £15k in deposits in the first place. You tell me how I can make a 50% profit on £15k in any other investment?
Oh and one day, when I'm old an knackerd and need expensive surgery to keep me alive, I can sell one of them, make a huge profit and pay for my op.
If I was a clever man, rather than spend the £700 a month profit, I would make over-payments and pay off the original debt. That way, my nice tenents will be paying off the mortgages for me and eventually the houses will be all mine and they only cost me £7500 each!!!! How can that be a bad investment????? Virtually a free house!
You guys crack me up, you really do. Doom & gloom in every thread. The glass is half full not half empty.
Different day and totally different facts and figures.
So sad.
OOOOOOOoooooooohhhhhhh !!!!! Don't you get it idiots ??? I'm filthy rich !!!!!!!!!
just wondered what property you have that's apparently worth £103K in a god location, modern 2 bed, freehold and yields £625 a month. Is that abroad, or are you a social landlord?
"Not sure what boat anyone has missed --- Anyone can
buy the same ticket now for 20% less than what you paid 4 years ago."
Sure they can, I'm not saying they can't. It's just harder getting the money out of the banks these days, that's all. The deposits need to be larger, the mortgage arrangement fees tend to be eye watering and BTL interest rates seem little better than they were back in 2007 despite the base rate of 0.5%, but sure property is cheaper, rents are higher and BTL investors are out there buying many properties cheap, keeping the market ticking along to some degree.
While better deals can be had right now, my houses will still be free'ish to me at the end of the 25-year period, minus my deposits, insurances and any repairs. It might just be that people doing the same as me today, 5-years later, could end up with their free houses around the same time as I get mine, because they bought at 20% less in the first place.
People should stop listening to the House Price Crash doom mongers and work the figures out for themselves. They will then see that as a medium to long term investment opportunity, the only mistake they are making is to hold back and not do it right now. Start that 25-year investment sooner rather than later. It's a virtually free house and it's a no brainer.
A few tips though. If you do it, avoid leasehold properties, stick to freehold, go for modern, avoid big gardens, stick to the outskirts of cities and big towns with reasonable employment and good transport links, 2-bed properties seem to be the best as they will appeal to single people, couples with no kids or couples with a child. 1-bed properties can be difficult to let and 3-bed properties cost too much to buy in the first place, yet don't achieve much more in rent compared to the cost of purchase and always pay that little bit more to get into the better area. Remember the location, location, location rule. Stick to these guidelines and you won't go far wrong. Remember, a house is not just for Christmas and BTL should be considered a long term investment. (Minimum 10-years)
Finally, if you do it, try to be a good landlord and look after your tenants. They will then look after you and your property. Remember that while it is your property, it is their home and a good relationship is essential. Keep rents competetively priced, else they will start looking elswhere and an empty property is costing you twice. Your paying a mortgage and your not receiving an income, ouch!
"How can this possibly add up to the £18000 (£4500/year) you claim the mortgage balance has reduced by? "
Because I own 4 BTL's the income from all 4 goes into one savings account and on the anniversary of each mortgage, I pay a chunk off, but its not an exact science so sometimes a mortgage gets a little more capital than another. For example, one of my lenders allow me to pay down 10% of the outstanding balance, another allows me to pay down 10% of the original loan and another only allows a maximum £500 overpayment each month. If one loan got a little more in one year and another got less that year it doesn't really matter. Just as long as the equity across the portfolio loans are reducing thanks to the tenants paying them off, what's the problem?
Sure boilers need servicing every year plus other repairs need to be done, but buying modern properties has reduced the repair costs thus far. Pick through all this if you want, it doesn't change the fact that property still makes a sound investment, because which ever way you slice it, more money is coming in than is going out. Profit is being created at a rate of around £250 to £275 per month, per property, minus of course the odd £80 a year in insurance and £100 in servicing costs. With over £3k a year of profit coming in on each property, it still stacks up. A value of £103k and £625 per month gives a yield of 7.28% and that's a great result in my book. :-)
"Chris on 2011-09-02 19:10:45
Property only goes up, buy property and become a billionaire.
You can't loose!!!!! "
That wasn't me by the way!!!
Estate agent walks into a bank and realises the commision isnt what it once was !
Just wait untill the Tax Man catches up with all the people that have lied about the money that they have earned, and what they told the Tax Man, HMRC are now being paid to recover money from those who admitted they earned more than the they declaired to the HMRC !
Been thinking of going into BTL for a while,and find Chris' figures very intresting.
No mention of any extra expenses which always apply
when buying with a mortgage,nor the cost of maintanance and insurance of building.
Would never get £625 per month on a £103K property in my area.
"Then what I do is put the difference between what I am given in rents and what I need to pay on the mortgages into a savings account. Each year, when I am able to pay some of the loan off without incurring a penalty, I pay off some of the loan with this money"
How can this possibly add up to the £18000 (£4500/year) you claim the mortgage balance has reduced by?
"Stop trying to find fault with perfectly sensible investments. I know what I am doing, I have proved that they are sound and all that I am hearing are silly excuses from people that don't want to be proved wrong or who are jealous that they have missed the boat despite house price falls of nearly 20%"
Not sure what boat anyone has missed --- Anyone can
buy the same ticket now for 20% less than what you paid 4 years ago.
Property only goes up, buy property and become a billionaire.
You can't loose!!!!!
"What happens when the bank starts a margin call on your investment? You did read the small print of your mortgage didn't you?"
Why don't you talk to someone that isn't in the industry! Of course I am aware of this, however, A) I am clearing my mortgages faster than anyone on a repayment mortgage and still have maintained my initial 15% of equity & B) The banks have not yet done this to anyone that I am aware of and buyers that bought using 125% mortgages have more to worry about than me.
Stop trying to find fault with perfectly sensible investments. I know what I am doing, I have proved that they are sound and all that I am hearing are silly excuses from people that don't want to be proved wrong or who are jealous that they have missed the boat despite house price falls of nearly 20%
I also forgot to add BTW, that I am self employed earning a 6-figure salary and could actually pay off completely any single mortgage if requested to do so from my savings alone, but choose to let my investments pay themselves off and use my savings as a safety net to protect my business & investments.
RE Chris "As long as my properties bring in enough rent to cover the mortgages I can keep hold of them no mater how much equity is in the property!!!"
What happens when the bank starts a margin call on your investment? You did read the small print of your mortgage didn't you?
"Tell me any other investment that provides you with a negative equity in a few years time with tens of thousands of pounds initial deposit, and eventually forces you to sell up?"
WHY DOES BEING IN NEGATIVE EQUITY FORCE ME TO SELL UP?????
As long as my properties bring in enough rent to cover the mortgages I can keep hold of them no mater how much equity is in the property!!! I don't think some people here have the faintest idea about what they are talking about. They hear something once from someone down the pub and think they know all about a subject!!
"A quick question have you got your BTL on interest only or repayment mortgage?"
This makes very little difference actually if you do the maths. As it happens, all 4 of my BTL properties are on interest only keeping the repayments as low as I can. Then what I do is put the difference between what I am given in rents and what I need to pay on the mortgages into a savings account. Each year, when I am able to pay some of the loan off without incurring a penalty, I pay off some of the loan with this money. If you go for a repayment mortgage, you will find that the bank decides how much equity you are clearing year after year with most of the interest being paid in the first 15-years. This means that if you need to sell up early, you find that you have just been paying the interest and haven't actually cleared much of the original loan! Every year when I pay off some of the equity, my monthly repayments are automatically reduced also.
"Chris -- please give more details -- price paid,deposit ,
mortgage repayments and rent."
Price paid= £122k
Borrowed= £103,700
Deposit= £18,300
Interest Only Mortgage was= £500
Rent is= £545
Property value currently = £103k
Interest rates have now dropped and monthly mortgage is only £349.88
Rent has now risen to £625 per month.
Profit stands at £275.12 per month.
Mortgage balance has reduced by approx £18,000.
gp58: aww! - coming to the defence of your ickle HPC fwwiend. That is sooooo sweet!
And obviously, YOU are the one who is now so enraged with jealousy that Chip kiss-hugged me so publicly...
Does this mean you demand a duel for your honour, monsieur (or even madame...)? Rapiers? Pistols at twenty paces?
Or do you just want to do the sensible thing and slink away quietly? That's what the smart money would have you do!
You see, ickle Chip is incorrect in saying that THE Michael Robson says house prices are too high. Feel free to show me any evidence if you feel I am wrong, of course...
He talks in his blog about setting the price right in order to attract potential buyers; he talks about asking prices being higher than the figure the property will usually sell for (...that is how the market works, you see...); and he suggests that in some instances the initial asking price requires adjustment in order to settle on an eventual selling price. He even has the audacity to suggest that buying a property is a GOOD thing!!
But he does not - repeat, NOT - state that house prices are too high, which is what Chip wants us to believe!
So... I may be arrogant; I may bore you; and I might even be childish - but at least I can read; AND your 'friend' is flirting with me... much to your obvious displeasure!
Now - anyone know how do you type a smiley face with its tongue out and thumbs in ears, wiggling fingers...? ;o)
If you arrogant,childish bore was half as clever as you think
you are you'd know that Michael Robson is chief executive
of Andrews.
Chip Douglas:
"They can be as affordable as you like but doesn't mean they wont get more so." Sorry - what?? Even the bull hasn't an earthly clue what it has excreted with THAT sentence!! Try again - this time in English...
"I agree with Michael Robson, property is currently over-valued." Good for you! And Michael Robson would be... who? Someone who knows what they are talking about - or simply the poster named 'michael' who posted seventeen minutes before you did - TOTALLY independently, of course... no collusion for added impact...
I trust you will both be very happy together.
Just be careful he doesn't get jealous of you kiss-hugging me so much, though! ;o)
Ray will be enjoying a glass or two of whatever takes my fancy as well while not enjoying England grind out a dissapointing result.
Have a great weekend all!
@Unhappy Chappy.
Thank you for your input.
Yes, I do understand the simplicity of the average but the devil is in the detail and to be really meaningful and useful one needs that detaill of how it is made up, the numbers, type, region etc..
I am now off to have a rest and a glass of warm milk preparatory to the weekend and attending the local to obtain more very interesting info from HPCers and their opposites. (joking!) ;>)
yo all have a good weekend too.
@PeeBee
They can be as affordable as you like but doesn't mean they wont get more so.
I agree with Michael Robson, property is currently over-valued. Seems like others agree which is why they CONTINUE to fall.
I included the capitals just for you, because it's Friday and the sun is shining xoxoxoxoxoxoxox
(apparently that means kisshugkisshug)
Peebee - Yes i saw stat that and wondered how they work that figure out.....It would be helpful if they showed or you showed the formula :0)
Average wage stats are as useless as average house stats :0)
Raymondo an average tells you the average thats all.....but you have to investigate what else an average will tell you i.e at lower transaction levels at the lower end of the market (i.e firts time buyer end) the overall average price will be higher...it is quite simple!
You'd expect it to be lower now than in 1989 because the average age of 1st time buyers is so much higher.
They will be on higher wages and a larger % will have 2
household wages.
With interest rates at 0.5%, then it should be at the lowest percentage ever...
In the past interest rates have gone up or down over the lifetime of someone's 25 year mortgage. At the moment though, they only appear to have one way to go. Only a dunce would stretch themselves to take on a £125K mortgage with rates this low.
Contrary to what the poster calling him/herself 'PeeBee' below said - THIS IS ME!!
Ahhh... good old Chip Douglas! Always aiming to surpass previous performance - and always meeting this expectation!
Yesterday's merde de taureau from Chip - "Renting 40 times cheaper than buying" - was an incredible height for the bar to be set at, I must say. THAT is going to be difficult to match, let alone beat - however, I have every confidence that he/she not only reaches it with ease, but sails over with yet another quote for the Wall of Shame...
Perhaps, Sir/Madam/Prefer-not-to-disclose, you would care to peruse the following and spin it into a negative (sorry - positive for you, innit?):
According to the Nationwide Indices, available on their website, the FTB Affordability Measure (whole of UK) currently sits at 33.9% of mean monthly take home pay being spent on mortgage payment.
This is the LOWEST percentage since Q2 of 2003. It is lower than FIFTY FOUR of the 111 previous ratings since this Index was initially compiled in 1983.
When do you think that affordability was at its worst? 2006? 2007?
Not even close. Try Quarter 2 of 1989 - when 55.8% of FTB incomes went on the roof over their heads!
Darn those Nationwide people! They offer statistics you don't like, as well as the few you DO!! ;o)
But I look forward to your offering of brown and sticky...
Chris
"Buyers set the price, not vendors"......not in the housing market my friend......here the banks set the price or is it the valuers or is it the agent..... one thing is for sure it is not the buyers :0)
"Why not lobby the banks to lower the deposit thresholds. That will make buying more affordable"
No it will only make the deposit more affordable, it will make the mortgage larger and therefore less affordable.
A quick question have you got your BTL on interest only or repayment mortgage?
Hello again rantnrave!
Aha! What about this.....
Averages mean nothing in a practical useable sense unless they are analysed properly by numbers, type and region.
Typical e.g. If one month !0 flats sell for £100,000 each and 1 grotty repo sells for £70,000. Quoting an average of approx £97,000! What does that really tell one.
Or am I still missing something? ;>)
I only go by the averages when they're falling ; )
Rant,
We keep doing this – you either read the averages or don’t sir, its bad form and not gentlemanly. You are an averages man and we love you for it so stick to your principles
You work averages; the EA’s here do the local / house type / exclude flats / cut out the Jocks etc etc from these figures – it’s the way it works
Jonnie
Well house prices look to be falling again over the Autumn and Winter.
Increasingly the media are talking about a double dip recession and confidence is falling.
We all know house prices are vastly overvalued with a decade of loose lending. Without a return to loose lending can a bullish estate agent tell me how they will retain their heated value when lending has cooled?
Prices are falling and estate agents should embrace this to increase transactions instead of trying to keep Never Never Land going.
Chris , you tell me what other investment will pay back a few houndred pounds per month only to be paid back to your bank straight away as mortgage arrears, while using the banks money to invest with? Tell me any other investment that provides you with a negative equity in a few years time with tens of thousands of pounds initial deposit, and eventually forces you to sell up?
Taking Ray's point further - if there are fewer FTBs around at the moment, then the transactions that are taking place are more a reflection of the equity rich who are higher up the ladder and trading amongst themselves. Correct? Transactions for lower priced properties are therefore dropping out of these monthly indices and skewing the numbers upwards.
Chris -- please give more details -- price paid,deposit ,
mortgage repayments and rent.
"Property is not the only game in town my friend. Spread your money around a bit."
Barry, you tell me what other investment will pay back hundreds of pounds per month, while using the banks money to invest with? Tell me any other investment that provides you with hundreds of thousands of pounds after 25-years with a tiny initial deposit and is indexed linked?
There is nothing, so you are wrong. Property is still the best investment around, period. You know that saying "Safe as houses"? It's as true today as it always has been, but like any investment, you need to choose carefully. :-)
In a location close to a 'Property Price Coference' and during the lunchtime break, an armed hooded robber bursts into a local Bank and forces the tellers to load a sack full of cash. On his way out the door with the loot one brave bank customer grabs the hood on the robber and pulls it off revealing the robber's face.
The robber shoots the customer without hesitation.
He then looks around the bank to see if anyone else has seen him. One of the tellers is looking straight at him and the robber walks over and calmly shoots the teller dead.
Everyone by now is very scared and looking down at the floor.
"Did anyone else see my face?" screams the robber.
There is a few moments of silence then one casually dressed HPCer, looking down, tentatively raises his hand and says, "I think this spiky haired EA laying on the floor next to me here may have caught a glimpse."
Averages mean nothing in a practical useable sense unless they are analysed properly by numbers, type and region.
Typical e.g. If !0 Flats sell for £100,000 each and 1 house for £1,000,000. Quoting an average of approx £180,000! What does that really tell one.
Or am I missing something?
Chris - not all landlords are sharing your optimism at the moment (apols if this is a huge link to copy & paste!)
http://www.citywire.co.uk/money/why-are-landlords-selling-when-rents-are-high/a520516?re=15703&ea=5946&utm_source=BulkEmail_Money_Daily&utm_medium=BulkEmail_Money_Daily&utm_campaign=BulkEmail_Money_Daily
@Chris
Property is not the only game in town my friend. Spread your money around a bit.
In a location close to a 'Property Price Coference' and during the lunchtime break, an armed hooded robber bursts into a local Bank and forces the tellers to load a sack full of cash. On his way out the door with the loot one brave bank customer grabs the hood on the robber and pulls it off revealing the robber's face.
The robber shoots the customer without hesitation.
He then looks around the bank to see if anyone else has seen him. One of the tellers is looking straight at him and the robber walks over and calmly shoots the teller dead.
Everyone by now is very scared and looking down at the floor.
"Did anyone else see my face?" screams the robber.
There is a few moments of silence then one smartly dressed Estate Agent, looking down, tentatively raises his hand and says, "I think this scruffy HPC'er laying on the floor next to me here may have caught a glimpse."
Barry I actually believed that priced were going to increase month on month during 2007. So much so that I bought two BTL properties in September 2007!!! Okay, they have lost 20% of their value, but it is only a paper loss and I count myself lucky to have been one of the last people to get easy money from the banks. They are both nicely rented out and are making me a healthy profit each month, so don't regret it for a minute. When I sell them in 20-years time, I am sure I will still do very well out of them and lets face it, my tenants will pay them off for me, so they will be technically free to me. How can a free house be a disaster?
Rant, I never said that they were motoring along at record levels otherwise prices would be rising wouldn't they?
Considering we only carry a stock of 35-properties, we still managed to sell 7 last month and are on 1 sale for September already and it's only the 2nd, so things clearly aren't that bad are they?
As has already been pointed out here, Estate Agents need transaction numbers, not high property values. Most of the agents in this area now charge a fixed fee to sell property, not a percentage of the selling price, so it matters not what they sell for. :-)
Last comment is NOT mine, and the next one will NOT be mine either !
2007 ave house price = £199k
2011 ave house price = £160k
Add inflation into the mix and real prices have tanked by around a third since peak.
I wonder if at any time during those 4 years you could have found an EA who'd admit that prices were too high? Or were anything other than "steady"? Of course not. The only sales tactic most know is to suggest that prices are only ever steady or rising. This is sounding more ridiculous by the day.
It is fun to listen too though. Keep it up guys.
Fun Boy Agent - what an idiot !
'Boring' Joker!
You and your idiot cohorts really don't get it do you?
An EA has no vested interest in prices going either up or down
WE COUNT TRANSACTIONS
ARE YOU ALL THICK.... OR WHAT?
Absolutely Chris, because the government and the Bank of England haven't been involved in supporting house prices at all. And as you point out, transaction levels are motoring along at close to record highs.
Funny! :-)
Clearly prices are not too high otherwise they would have fallen much further. Buyers set the price, not vendors. Sales are still happening, so vendors just sit tight and wait their turn.
Why not lobby the banks to lower the deposit thresholds. That will make buying more affordable. Buyers now have to save double what they used to in order to buy a house. Are you seriously expecting home owners to halve the value of their properties to enable buyers to save the same amount for a deposit?????
I know a few die hard House Price Crash folk from a few years back that bit the bullet and bought homes earlier this year. Strangely enough, they they don't post anymore about over priced houses and are now hoping prices will rise again. Funny how people's attitude change depending on which side of the fence they are standing isn't it! :-() Lol.
They should both borrow a book on 'getting on with their jobs'' ;>).
An EA goes into his library to explain to the librarian that he will never be able to sell a house and as a result feels worthless ..... all because house prices stubbornly refuse to go up as he wants them to. So he asks to borrow a book on suicide.
The librarian says; "You gotta be kidding! you won't bring it back."
An HPCer goes into his library to explain to the librarian that he will never be able to buy a house and as a result feels worthless ..... all because house prices stubbornly refuse to come down as he wants them to. So he asks to borrow a book on suicide.
The librarian says; "You gotta be kidding! you won't bring it back."
January - not good - New Yrs Day and too cold
February - not good - only 28 days and still too cold, snow
March - not good - still too cold
April - not good - Easter and still a bit too cold
May - not good - 2 Bank Hols
June - not good - too hot
July - not good - too hot and dry
August - not good - Bank Holiday and still too hot
September - not good - too wet
October - not good - wet and windy
November - not good - too cold
December - not good - cold, snow, Christmas
You blokes are on the wrong website, you need housepricecrash where you can all ponder the demise of the UK housing market together and bemoan the affordability etc.
In the meantime, EA's can come on this site for news and views.
This story just told you "no change'. If you want EA's opinions at local levels, just ask an EA locally. For Pete's sake please stop pounding the same drums about prices needing to come down to an audience who has no real preference for either higher or lower prices, we count transactions.
You are 'boring'
The cost of everything single thing that constitutes a residential property is rising quickly and that will be reflected more in the price of new builds fairly soon - next year? Second hand property will then stabilse and then slowly rise in line. Those that can afford to buy will buy, those that cannot will not.
That is my view and it is just as valid as that the hysterical HPCers. .
Brit1234 - I have no vested interest as such. Not an EA not looking to buy either.
I think prices will trickle down over the next 18-24 months. Only a significant increase in the base rate will cause prices to come down quicker.
House prices will continue mostly falling for the next 9 months on the Halifax and the Nationwide index's. Land registry might be up next month due to lag but should continue to fall.
We all know house prices are too high and wages can't support them. Prices will be coming down. All this talk about stagnation is rubbish, when in history has house prices stagnated? Its just vested interest talk to try and calm people from the actual falls.
Take out the seasonal adjustment and it's -1.6%. The reason?
Property is wildly OVER-PRICED and everybody knows it.
Doesn't the Nationwide read the Daily Express? Don't they realise that house prices are screaming up 20% and that new homes builders are desperatley looking for tradesmen and new sites? Discounting? What discounting? Jeez I give up.
Paul - "Take out the August holiday slump and I bet there is no material change" No change in what?
Volumes will continue to be low...house prices will remain stable or trickle down. yawn!
Take out the August holiday slump and I bet there is no material change.
EA's with a brain know that August and December are not good so I work on a 10 month year but stats go for 12. Suppose there is some sense in this form the stats point of view but I work on real life and not statisfiction. (Just made that up - is it a real word?)
Useful additional info. It begs the question, what should be done to get market throughput back up again?
After all, most people still want (and need) to move house as much as usual.
In addition, agents hope to make an acceptable living from working the market. Don't they want to increase this, or at least keep their incomes more steady?