Estate agents will have to chop the prices of properties on their books in order to stay in business, Hometrack has said, after the number of transactions slowed down in May.
A separate report from the Land Registry said that house prices tiptoed up 0.8% in April to reach £163,083 in England and Wales. House prices are now 1.3% lower than a year ago.
However, a 3% monthly rise in London’s house prices, taking them to 5% higher than a year ago, will have distorted the national picture. Outside London, house prices rose in six regions but fell in three.
Like Hometrack, the Land Registry also drew attention to a slump in transaction levels.
Although the Land Registry’s data only goes to the end of February, it said that sales between November and February averaged 46,818 a month, down from an average of 54,479 a month for the same period a year earlier.
Meanwhile, Hometrack said that with sales volumes slowing down, agents would look to reduce prices “in an effort to support sales volumes and revenue in the months ahead”.
Hometrack’s 1,600 agents said that house prices have moved very little – the survey registered a fall of just 0.1% in May – but warned that the number of sales agreed was down by 1.6% and the average time on the market had risen to 9.7 weeks.
It said that supply of houses for sale has grown by 14% over the last three months, but that demand has risen by only 7%. However, in May, for the first time, demand actually dipped, albeit by only 0.5%.
The Hometrack report also commented on the enormous split between London and the rest of the housing market. For example, in London a house takes just 5.9 weeks to sell, but in the Midlands it is 11.5 weeks.
Peter Rollings CEO of London estate agent Marsh & Parsons, said: “London is defying the dip in house prices elsewhere in the UK.
“The Land Registry figures show a monthly jump rise of 3% in April, but in some prime parts of London we can confirm they are even higher.
“The reason is that there is still a shortage of property on the market, around 50% of its long-term average.
“Some potential buyers are still being restrained by the inadequate availability of mortgage finance.”
However, there are small signs that the May market saw transactions creep up, albeit marginally: see the story on For Sale and Sold boards.
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Comments
PbroAgent: Oh, well - into the fire goes I...
"so why have surveyors to downvalue property when a buyer gets carried away?
That estate is full of homeowners who got carried away and overpaid for property. It's the old cookie of knowing the price of everything and the value of nothing, it doesn't mean they are all right."
OH... COME ON, MATE!! I cannot believe for one second that an experienced Agent has fallen into THAT mode!
So... ALL of those buyers were wrong, were they? And ALL of their surveyors as well? Blimey! You'd hardly credit so many fools being in such a small place... Or maybe not.
I'm not even going to go there with regard to the 'downvaluations' comment.
I sincerely hope, on behalf of your present and future vendors, that I do not need to. My junior negs were taught the answer to that one before they picked up the phone for the first time.
@Brian
"Mention prices and same sad people are bound to post, Mike Wilson, does your boss who you say pays you are 6 figure salary know you waste so much of your little life not working. Work harder and perhaps you could help your poor kids perhaps? "
Tee hee, you have to laugh. I think I've explained a good few times that I am not worried about MY kids - I'm worried about their generation. I don't understand why we (I mean you) are so determined to shaft them.
And as for my boss paying me a salary - in my 40 odd years of working I have had a 'boss' for a total of about 5 years. I work for myself - I write software and my customers rent it off me. It's a great crack - once it's written every new customer is a sort of bonus. As long as the servers stay up - the money rolls in. Residual income - nothing like it!
But, writing software is a bit tedious sometimes - so, whenever I feel like it I take a look in here - to see whether any nonsense is being spouted - and comment if I feel like it. I drink too much tea otherwise.
Wardy, unless i'm mistaken, both RM and Hometrack have implicitly admitted that asking prices are too high. I don't know about you but that's a rather bearish outlook if there ever was one.
I have always maintained that EAs need to convince vendors (good luck with that one) to reduce their asking prices before we can have any semblance of a functioning property market.
All this article does is substantiate my opinion.
The recent Standard and Poor report, that advises us that if prices drop 5% this year, and 5% next year, 30% of by to let landlords will have problems gearing, should make sobering reading.
I wonder what will happen to, these properties?
Oops my last post should have said 200k house for 300k.
"1. A property is worth what someone is prepared to pay for it and NO MORE, NO LESS." so why have surveyors to downvalue property when a buyer gets carried away?
That estate is full of homeowners who got carried away and overpaid for property. It's the old cookie of knowing the price of everything and the value of nothing, it doesn't mean they are all right.
Geoffk: so - what's your place worth TODAY?
sibleys,
slump, downwards, tiptoed are some of the words used in this article. Nowhere does it say crash. So it doesnt echo the HPC sentiment does it?
The house next door to me has been on the market for the last two years,,it is a impressive house with separate coach house and plenty of grounds,went up at 595k and was drooped over time to 450k,last night a new board has gone up with a new right move listing and its gone with town and country for auction at 395k reserve..some people are saying there is no price crash..believe me it is under way as we speak..i moved in last aug and the house i bought was originally on for 299k and i paid 186k and got the seller to pay my stamp duty ..this crash when you look back will be one that was a slow process and passed some people by.but a crash it is..
Cripes, it comes to something when the likes of Hometrack and Rightmove start echoing HPC sentiment.
When the last bull turns bear etc.
@will. Asking price reductions alone are unfortunately not indicative of a crash. The real measure is the agreed price versus similar properties in previous times. If I put a 200k house on the Market for 200k the Market hasn't dropped by a third when it finally sells.
PbroAgent - your "real world" example. Let me get this right, please...
You market it at £x. Multiple offers fly in. The property attracts B&F offers of £x+1000, and £x=10000.
I'm right so far, yeah?
SO - now, because these offers have been received, the theory is that the buyers got their sums wrong and bid too much - yeah?
A few questions, if I may...
I take it the sale proceeded? That a survey/valuation was effected on the property? That this did not reveal an undervaluation and subsequent re-negotiation was therefore not required? That the buyer was happy with their purchase?
Mate - I'm not saying YOU are wrong or at fault here. I'm pointing out that the age-old rules apply, regardless of the circumstances/market/whatever:
1. A property is worth what someone is prepared to pay for it and NO MORE, NO LESS.
2. If you don't ask, you'll never get.
3. It's far easier to spot an anomaly after it's occurred, than before. LEARNING from it is the hard part.
Over to you, mon ami...
I echo those thoughts Roberto.
Anyway waiting for the banks to return to the lending levels of 2007 hasn't, in my opinion, grasped why there was (and still is) a credit crunch.
This is the new normal - the lending levels in the run up to 2007 were the exception, not now. Lenders have got their hands burnt (many would have gone under in 2008 without bank bailouts) and are returning to loan criteria as they were at the turn of the century.
Country lass
the banks are too scared to lend, mainly due to stories like this. I'm fairly certain that the amount of mortgage products now are vastly below what they have been.
------
The banks are too scared to lend Country Lass, because they know prices ar etoo high and they already have hundreds of thousands of dodgy-priced properties on their balance sheets.
If a house falls in price via a sale, a bank has to legally place all its houses in a similar area down by the same aount. that destroys their balance sheet, forcing them to hold more cash. And since, the credit markets closed in 2007 to collateralised loans including mortgages, they have no alternative finance, except hoping the govt prints more of the stuff.
Banks cannot afford to dole out easy mortgages any more. They won't even go back to normal pre-bubble 90% LTV until the market falls to a manageable level.
That probably means a fall of 25% minus inflation. It could take two years, or disaster for EA industry and FTBs much longer.
PeeBee "NO SPARE CASH?? NO INTEREST?? Come on - with this sort of attitude is it a wonder that banks are reluctant to lend?
Dump the mobile phone - there's £35 a month. One night a month staying in at the weekend - how much will that save - fifty quid? A hundred, maybe?"
I agree with you, but the sacrifices you are talking about are officially considered to be marks of poverty according to the Joseph Rowntree charity, and these are the poverty numbers that the media trots out.
Shortly after Labour came to power having aimed to secure the vote of "Mondeo Man", the Ford Mondeo dropped out of the top 10 selling cars to be replaced by the BMW 3 series bought on the never never on rising property prices. From 2000 the UK banking system ran out of savings to relend out as mortgages and they had to do a Northern Rock and borrow on the markets until 25% of mortgage lending and £700bn had been issued this way.
People don't want sacrifices. They want to make money for no effort by owning a property.
PeeBee, not necercerally. I'll give you a real world example: we recently exchanged on a repossession, a 4 bed detached house on a massive new private estate. All the other similar 4 beds in the area are on the Market and not selling for 220-230k. Typically when they sell, they go for between 195-200k. The asking price was rightly 200k for a timely sale, but the buyer was from out of the area and unusually didn't do their homework properly. They clearly looked at the other houses on the Market and when they were asked to submit best and final offers against another buyer they went up a full 10k versus the 1000 the "losing" buyer increased.
I will admit that one property that went for 20k over asking was underpriced, the the managing company went on the lower valuation of another agent and the property still sold for 5k less than my recommended asking.
@PeeBee Hola!
Although we rarely get to find out what they offer the vendor (on this occasion we did) they seem willing to take the hit in order to sell the new build at the top. They no doubt factor this into the asking price. I can smell desperation every time I speak to them.....sad times.
I have an anecdotal off this today. Got an prime location alert through last night. A 4 bed place has just dropped in price from 425k to 399k. It started at 450k in mid December. 12% in 6 months. Not bad, but still over-priced in my humble [non greedy] opinion. They should feel
lucky if they get over 350k.
Anna - whether or not it is deemed good marketing (which personally I disagree, by the way...), that was not my point. PbroAgent said that the properties were "priced right and they are correct" - which I cannot see being the case when they then sell for way above the quoted asking.
wardy - hiya mate - long time no 'chat'! So what are builders then doing with the properties they buy in at suicidal prices? Are they marketing at same - or trying to cover costs or even make a profit by bumping up?
PeeBee could be good marketing, our friends north of Hadrian’s wall often use Offers Over or Fixed price, mind you they then normally sell below the Fixed price!!! So probably not!!
And always below their Home Report prices which shows the value of a HIP valuation.
Interestingly we are seeing that the worst culprits for low asking prices are the part exchanges at the mo. As far as I’m aware they are taking an average of 3 agents valuations based on a 7 day turn around.
7 Days! No wonder they are coming in low. The last vendor who had a part ex val done told new homes to poke it, waited 3 weeks with us, got and extra 15k, let us neg the asking price for the very same new build they were interested in. Total saving = £26 odd grand.
I haven’t seen a repo lately with that sort of margin.
PbroAgent: Just picking up on something you said...
You started with "Other agents have clearly said that corporate sales are much easier to sell because they are priced right and they are correct. The emotion is removed, and the houses are properly researched by the corporate middle-men, prior to instruction." You THEN said "In fact I've had three or four cases in the last 12 months, where prices were so competitive the offers went OVER the asking price (in one case by £20k), because the buyers knew they would not get a deal like this off a "normal" vendor."
BIG contradiction there, mate, isn't it? They are either priced right or they are not. £20k OVER asking ain't "right" in ANY book...
the yorkshire agent. Have a good holiday in Skeggy. This year I am going to Worgate...
Glad to see I'm back to being one of your favourite kn*bs! ;o)
PbroAgent: If it wasn't for vendors and purchasers, you'd have a better job than Judith Chalmers, mate!
Trouble is, they never come in the correct proportions, do they?
This is what the rest of the working population fails to grasp. You take a car in for service, the mechanic (do they still call themselves mechanics?) goes about the service in the usual order of things. Every now and then, he/she might change the plugs before the filters for a little variety - but they both get changed and the result is they make the car run a little better and the owner pays them for the service. IF ONLY the home-selling/buying process could be condensed into a Haynes Manual!! The point I am getting to (eventually) is that professional salespeope generally deal with professional buyers. They know what they want; when they want it; and how much they are prepared to pay. Yer average buyer or seller is a rank amateur - and only guesses at all three of the above magical ingredients that mix to make their next home. That's why the 'professional salesman' would last a week tops as an Agent. No Salesman's Bible will work - the rules are there are no rules; and the goalposts are there only to be moved when you think you know where they are.
99% of the public don't realise what an asset a good Agent is...
Interesting link Bob... Ta.
Here's another one from the investment magazine MoneyWeek which examines a lot of the issues being discussed on this thread:
http://www.moneyweek.com/investments/property/uk/uk-house-prices-are-heading-for-another-double-digit-fall-12208
One of the big banks reckons UK banks are going to be in danger due to house prices falling by 10% in the next 2 years.
I Am going back to reading The Sun and avoding all this financial news. Looking at models makes me feel happy, reading housing market news makes me want to go for a long walk off Mumbles pier.
Morgan Stanley fears for Lloyds in 10% house price slump
http://citywire.co.uk/wealth-manager/morgan-stanley-fears-for-lloyds-in-10-house-price-slump/a496156
Ladies and gentlemen, I'm off on holiday for a fortnight Skegness probably not Sechelles anymore. PeeBee thanks for the message, yes you're still talking a lot of sense. Hopefully i'll come back to a transformed property market, not holding my breath though.
Re-po's are a problem if used as comparables.
All the lender is interested in is to obtain the amount of money back that they loaned and after the 'normal' amount of time (4ish weeks?) will accept a reaonable offer based on that amount. In many cases it will bear no relation to the property worth/value yet will be used in comparables?
Distorts the market.
Honest John.
I couldn't agree more.
I'm finding that buyers here are incredibly savvy whilst vendors are generally clueless. What I mean is that for most property types in most areas of the city there will be anything from 6-20 unsold examples, the buyers are viewing most of them, checking various websites, looking at land registry prices, calculating market fluctuations since the property last sold and thoroughly researching the market prior to offering.
In most cases when we get offers, the offers are spot on to what I think the house should sell for in this market - yes there will be buyers here and there who chance a really cheeky offer on a property but if it is priced correctly, we'll soon get a more realistic offer.
The problem is that for the most part, vendors do the opposite (even if they are the same person as the buyer described above). The research that they spend hours on for the houses that they might buy is completely neglected for the one that they are selling. For that emotion takes over, they know what the house cost, they know what they have spent since they bought it and so many are chasing their lost cash (often much of it paper gains) like a desperate gambler chases a lost bet.
Other agents have clearly said that corporate sales are much easier to sell because they are priced right and they are correct. The emotion is removed, and the houses are properly researched by the corporate middle-men, prior to instruction. In fact I've had three or four cases in the last 12 months, where prices were so competitive the offers went OVER the asking price (in one case by £20k), because the buyers knew they would not get a deal like this off a "normal" vendor. The larger issue though is that these properties then become the comparables for the next tranche of buyers and their surveyors to compare to, pushing prices down further.
In my market place, the properties priced correctly will sell in 4-8 weeks and overpriced properties just won't. PeeBee asked "where do buyer and seller meet and agree?" Answer:- Where the comparables say, else the vendor is in la la land and will eventually withdraw.
Simples.
Bob, i dont know why people go looking at houses when they dont have a mortgage agreed in principal, DOH !
we should have kept 3.5x earnings at 95% max, it was axed in the late 90s, thats why prices were allowad to rise out of reach, and out of control for the last 10 years, prices need to fall by 20% plus to get back down to affordable levels for the average Family income, when proffessionals like police, nurses can not afford to buy a house you know somthing is wrong with the housing pyramid.
The offensive post by Eric has been deleted. Thanks to Ray for directing my attention to it.
Rosalind
Please censor and ban Erics email address.
We can do without the sort of lanquage he uses.
Disgraceful!
I can't make head nor tail of this thread and who is saying the market is fine and who is saying the market is collapsing.
Unrealistic seller expectations in Swansea is a huge issue at the moment but it is not the only issue.
Buyers seem mostly oblivious to how little the banks are lending or how difficult it will be to sell their own home. So many buyers are putting in offers on houses that they stand no chance of raising the finance for.
The problem is that when sellers get an offer it establishes that price in their mind even though the buyer has not the finance available to go ahead and purchase. Chains just dragging on and on with sellers desperately holding out for that one offer to manifest itself in an exchange and completion.
Housing Market Forecast
----------------------------------
Things are looking grim. Asking prices too high, FTBs blame Estate agents, Estate agents blame vendors. House does not sell so vendor blames Estate agent and changes to new Estate agent. Asking price still too high for FTB.
Vendors believe prices are going to recover and rise all because a few Oriental and Asian people are buying all the central London property with export money and weak pound distorting the national figures due to low transactions else where.
All round the UK property prices will fall except for the central London bubble which will explode when the Chinese economy overheats in a few years time
Peebee, yep thanks for the support, kept reading that thread back and not entirely sure what I said wrong, not been on the end of a lashing on this site before...makes you a little nervouse about posting for the fear words are words and can be dangerous without expression!
Not quite the record for the number of copmments but the record for the longest replymust surely go to PeeBee.
Dont worry it will soon be Christmas.
Oops... end of the '80s in Japan...
Following certain periods of rapid house price increases in the past, prices have eventually levelled off and then become more affordable through significant wage inflation. I believe this is what the government and Bank of England are trying to bring about this time.
Currently we're getting the price inflation but without the corresponding increase in salaries. Even if house prices remain static, the squeeze on food and fuel bills actually leaves less money to meet rent and mortgage payments though.
More than ever, UK workers are in a global competition for jobs. Businesses based here on the whole do not have the spare cash to pay their workers more. Even with the lower Pound, data out today says manufacturing output is not going to be creating lots of jobs or earning big bucks any time soon.
The model that this country seems to be following is similar to that of Japan after their extraordinary property bubble at the end of the 90s. Interest rates there have been minimal for two decades, and even though house prices slid substantially, the economy is pretty much the same size as it was 20 years ago. Hardly an example to follow...
Ric - hiya matey! You might want to call me a kn*b after this... but can I just remind you that I've been backing you all weekend when you upset a couple of folks - so be gentle with me! ;o)
You said "...they expect you to adverise the house, keep them posted, sell to the best bidder, check fundings, chase the sale and keep available to exchange..." Tell me I'm wrong, but haven't you just described what an Agent does for a vendor - EVERY vendor? With the exception of full availability - although as you say, firstly it is good practice (and mores to the point there are MANY who do not follow this procedure with repos - and yes, I have first-hand experience of this recently...), the rest is standard Agency fare is it not? No pesky forms to fill in for Mr/Mrs Average, I grant you - but they still expect you to do all the rest. The problem is that you get probably LESS for doing all that than the factoring agency gets for giving you the instruction! All at the expense of the defaulting borrower - makes you wonder how the lenders can justify best price when they run up these huge expenditures (oh, yeah - in most cases they can't!).
Like I said - I don't blame Agents. I was one - and had my fair share of fees out of that particular pot. Dirty job but someone's got to do it, as they say. The problem is however, these sales are weighing heavily on your existing stock and will pull them down. In the 90's it wasn't as noticeable. If a property was five grand less you could explain it away. Now - it's thirty grand on a good day, from what I can see. And that's here 'oop North'. Lord only knows what the craic is dahn sarf...
Like - and agree with - what you said at the opening of your post, by the way. PDS definitely works both ways...
Question is - where do buyer and seller meet and agree? (PeeBee leaves the room leaving door wide open for HPCers to come in... ;o))
Lets spend our way out (as the previous elected dictatorship suggested).
Lets cut out way out of this (as many EA's are suggesting).
Dip in prices.
Rise in prices.
What tosh. As AC said: Deep breath, suck it up and carry on. Don't forget to keep smiling even if it is through clenched teeth!
the yorkshire agent. I am FAR from a world authority on Estate Agency - or anything else for that matter, Sir. I simply react to what I see going on around me.
One thing I need to make clear - and I apologise for not doing it sooner. I do not blame YOU or any other Agent for following what you are instructed to do by the vendor of the property. It is the system that is flawed - and as long as it is flawed you will have a two-tier set of 'values'. The problem is as I see it, that because these properties go under offer so swiftly, you begin to see these prices as 'market value'. This is simply not the case.
From my experience - and from what I am told by currently practicing Agents (which of course, I am not, so I can only go off what they say - which I have no reason to doubt...), the Agent's recommendations are seldom taken into account when it comes to marketing price on repo's. Two Surveyors - and a third if more than 5% adrift. I am also aware of many single valuation instances - depends entirely on the lender.
Of course, what I SHOULD have taken into account in my responses to you, is that there will be regional or even parochial variations in the type of property that will be affected by repossession. It is unfair of me to lump all in the same basket. Take your patch, for instance. Do you cover new-build estates with multitudes of flats and three-storey, pencil-wide terraces with ample parking for a Raleigh Chopper? I surmise that this forms a very small part of your yearly turnover - and these are some of the areas of highest risk.
In my area, releases of developments (or even entire developments!) were sold to BTL investors - and these are now suffering the consequences. It may be argued that many were bought under 'dubious' conditions - that values were skewed to suit; cashbacks and hidden incentives flying all over; and less than cosher 'valuations' were floated - but in many instances the buyers were unaware of these and did not have the nous to carry out their own due diligence. Whilst I agree that these are not 'yer average' buyer - they are still people, and many lives have been ruined or damaged permanently (NOT MINE, by the way - in case you think I am a bitter BTL bankruptee with an axe to grind...). Thing is, these are people you never see; never have to face - so it is easy to put them out of the equation. You are instructed by the lender - who are now the property owner - and what they want out of the sale is a completely different thing to var nigh any other vendor you act for.
But what you see happening with these properties when they are marketed beggars belief. Looking at some of the 'values' placed upon them, they appear to be valued on rental yield alone, not bricks and mortar - and certainly not as a residence! The sale prices confirm what I say here. You look at repos across the country. Properties bought in 2007, 2008, 2009 - all now selling for coppers in the pound of their original purchase prices. Okay... they were never worth what people paid for them - but surely they are worth more than they are currently achieving?
It's a little like our previous discussion over fees, YA. You don't want to ask more. You don't know whether people would pay more, because you don't ask for it. The same goes I am afraid with these sales. Okay - you may well achieve full asking on some; you might even get offers over on a small percentage. But until they are marketed at prices which TRULY test the market and allow best price to be achieved, then we wil never know... will we.
I am sorry you fell foul of my earlier ire. I have said before, you generally speak a lot of sense on here. The words you used were, in my opinion, inappropriate and I believe gave the impression you revel in misfortune and tragedy (which, I am sure, you do not). Hence my suggestion you revisit what you said.
Maybe I went about it in a kn*bbish way - I am certain many would agree (and I did say beforehand...) - however as someone who feels that the market cannot allow itself to become two-tiered in this way, I hope you can see the other side. Unless Agents want to survive on distressed sales alone, that is - as I cannot see Mr/Mrs Average being prepared to sell their property for the last repo sale price. Mores to the point - I don't see why they should...
Over to you - I am braced and ready... ;o)
Totally agree it is the vendors rather than agents who need to drop their prices but expectations need to be managed by the agent.....PDS Price Denial Syndrome, is back.
On the other hand, you cant blame a home owner for wanting more when they read prices have risen as they sit waiting for the next months report in the hope of another rise!, simply the opposite hat to the FTB who reads the downward report who will in turn wait for a further slip. So sellers and buyers holding out for opposite hopes.....(each is right in their own mind)
Easy sales, Repos far far from it! Nice sales but never easy far to much red tape to go through...but when you analyse the red tape, they expect you to adverise the house, keep them posted, sell to the best bidder, check fundings, chase the sale and keep available to exchange...(fair enough in a way, good EA service in fact, Its harder today because you dont deal with the Bank or Bsoc like previously, we now have middle men/women, taking a cut of the fee for referring to repo, to pay back what the paid to get the business in the first place!).....the easiest sales I think today are the chains! vendors who are prepared to pass negotiations up the chain, loose 10k save 10k everyone motivated to make it happen! with the right agents working TOGETHER!
Investors pull out or gazunder, FTB's change their mind because of mum and dad or a headline pointing in the wrong direction...people without chains often have no consequence in pulling out, where as someone in a chain is often more motivated by virtue of being pushed by their buyer.......my opinion but I will have a decent chain any day (although there is always a "nothing to sell" at the bottom to a chain)
all in all though...with reports of prices rising, getting reductions will become harder and new instructions over the next few months will probably be at higher initial testing prices as a result (rightly or wrongly so).
Mention prices and same sad people are bound to post, Mike Wilson, does your boss who you say pays you are 6 figure salary know you waste so much of your little life not working. Work harder and perhaps you could help your poor kids perhaps?
Anyway what have the romans ever done for us?
The main Asset Managers are Corporate in it to feed their agency offices, want to get one cheap that’s the place to go.
Remain on market till exchange and take higher bids? I think not.
Buy from them, sell through independents when you want the best price is a good rule.
PeeBee, we all know that you are the world authority on all things estate agenty, but my friend, and i can only comment on the way my company handle sales, you are wrong. For the majority of lenders estate agents also submit valuations, along with one or two surveyors, if the prices differ by more than a few percent another opinion is sought. PeeBee, I can not match your 33 years, but I have been selling repos for over 20 years and the way they are handled today is very different from 10 years ago. Many sell to owner occupiers, if I have 2 offers on a property one of 100k cash from an investor who will complete in 14 days and an offer of 102k from an owner occupier requiring a mortgage, invariably it always the higher offer which gets accepted - which is quite right. I used to earn 2% fees from all repos, now many fees are dipping below 1%. The only repos i tend to sell to developers/investors are those unsuitable for mortgage finance. I sell properties correctly and ethically here in drizzly Yorkshire it worries me though that it is still far too easy for agents to sell properties to there 'preferred purchasers' and their brown envelopes.
the yorkshire agent - "All houses I sell - especially repos (due to public notices etc) sell for market price, they tend to sell quicker as they are priced correctly."
Well - just to add to my well-deserved title of kn*b -
It's nice to hear that this market is being dealt with much differently in Yorkshire than in the rest of the country. Is this a trial that will be rolled out nationwide, perhaps?
Don't confuse 'market price' with value or worth, Sir. The fact that a scabby no-photo box ad hidden in the corner of your main advert is reluctantly published half-way through the sale process does NOT mean that the property has sold for the best price achievable in the market. It was the same in the 90's - and despite laws being changed to supposedly protect the defaulting borrower, nothing else changes.
In percentage terms, how many of these repos and deceased estates you sell are being bought by REAL people? Not investors, 'pwopwerty developers' or get-rich-quick merchants. How many are not then being sold back-to-back or within three months (seems to be the Sarah Beeney/Homes Under The Hammer timescale to work off these days...)? How many are being lived in and not rented out?
Whilst on the subject of being "priced correctly" - can I just point out that you generally do not "price" these properties! They generally come to you with a marketing price on them; and usually one that has been recommended by one or more Surveyors - who may I remind everyone are currently downvaluing EVERYTHING to the nuts in fear of their PII taking hits, so they're hardly going to be optimistic with a 4-week sale figure, are they?
But... you keep saying it. One day, you'll possibly even believe it yourself. But please don't try to kid someone who has been in the industry for 33 years - and has probably (regrettably) sold as many if not more repos than you...
Mike Wilson. Good to see you still here! Without the likes of you, rantnrave & Sibley's the more pleasant side of the HPC movement would not be seen here.
Okay. You refer to terraces in Newcastle. Do you live there, Mike? I DO. Give me examples of where you refer to - and I will happily tell you why the prices were what they were before and after. There HAS to be a reason, as believe me, the great majority of property in the city and surrounds performed no better than anywhere else in the country - and nowhere near as well as a fair chunk of it.
Now let me repeat what I have just posted on another storyline as a response to our old mate rant, with regard to these polls/surveys/call them what you will.
"You will no doubt have seen the Halifax survey, rant. Some of the more militant HPCers will have no doubt got really excited about it (pity, really - as the message is so bleak...) but it states that two thirds of non-homeowners doubt that they will ever own a property. That's sad.
But here's the thing. According to the report, the perception that banks are not lending, the size of mortgage deposits necessary, and a fear of the application process has prevented young people from making any significant attempts to buy a home. Only 5 per cent of the survey group were making sacrifices to save for a deposit, and 95 per cent say they have no spare cash or no interest in saving for a deposit.
NO SPARE CASH?? NO INTEREST?? Come on - with this sort of attitude is it a wonder that banks are reluctant to lend?
Dump the mobile phone - there's £35 a month. One night a month staying in at the weekend - how much will that save - fifty quid? A hundred, maybe?
rant, mate - these people are doing your cause NO favours. Judging by the above, lower prices will help NO-ONE as the majority are too busy living it up to put their priorities in the right order!
Or is it just that the representative sample was the cast of Geordie Shore?"
Over to you, Mike. I look foward to studying your examples of rampant inflation in my back yard. As the Beatles sang, "There will be an answer..."
yep peebee, I think your're being a kn8b again. I stated a fact which many agents will agree with.
Corporate sales are anything but easy money, for example I have recently sold a little flat (repo) for 80k, my fee...£800, for that the client had 3 press ads, about 15 accompanied viewings, weekly reporting, etc etc. Why do you refer to us selling houses 'at someone elses expense' All houses I sell - especially repos (due to public notices etc) sell for market price, they tend to sell quicker as they are priced correctly. Very few repos I have dealt with recently have been 'distressed' cases - they all tend to be failed buy to let investors or those who simply dont pay their mortgage (there's always a Plasma telly though) Those families who have fallen on hard times rarely get their properties repossessed.
Sounds about right to me. With the odd exception all we are currently selling are death/divorce etc. places to FTB's and investors. We're doing (relatively) brisk business when pricing around the 2006 level.
Chains are a pain with second steppers generally having no equity or savings and boomers unrealistic about prices.
With prices slowly fallingFTB's are taking the opportunity to chill out, save lots and grab themselves a nice 3 bed semi. I don't blame them.
the yorkshire agent: Well - time for you to call me a kn*b again... "I'm finding the majority of houses selling are those where 3rd parties control asking prices i.e repo's, p-ex's, and the lovely death and divorce cases"
FORCED SALES, you mean - or as Agents prefer to think of them - easy money for you at someone else's expense.
Do you realise what the last seven words of your post do to your credibility?
A Ratner moment if I ever saw one...
PS - Ray is spot on! Guess I'm a double kn*b, huh?
er....Ray Evans, am I missing something, vendors won't need to drop their prices to keep agents in business, they will need to drop their prices in order to sell their houses, that is probably why they have their houses on the market as they want to sell them.
anyhow the board man has just driven past in a new van so the market must have turned.
@Mike Wilson
Many are saying prices must fall so much that they WILL be below replacement cost.
If you are baffled you really must study human nature.
For ordinary people prices going UP are different to them going DOWN.
Of course not all traders will go - but a lot will.
Must rush - things to do!
Thanks Mike, at least you've admitted we arent the spawn of Satan and will get into heaven!
The comment about the lack of available mortgages doesnt neccesarily mean more debt, just that people with a deposit and on a decent wage can't get the mortgage they want, as the banks are too scared to lend, mainly due to stories like this. I'm fairly certain that the amount of mortgage products now are vastly below what they have been.
@RayEvans
You said:
"Why should vendors drop their prices below replacement cost, unless they really are desperate, just to keep EA's turnover up and keep them in business - as seems to be the thoughts here.
If a market deteriorates the traders go too! "
Who said anything about dropping prices below replacement cost (although what this has to do with anything baffles me)? When terraced houses in Newcastle went from 15k in 1997 to 120k by 2007 - had the cost of building them increased by a factor of 7? No, the price was driven up by insane lending which, lest we forget, led to a banking bail out we'll be paying for for a generation. Now the insane lending is over, prices must settle back to what they were before the insane lending took over.
As for your comment about 'if a market deteriorates the traders go too!' - well, actually, that is not true. Sure, you might get less traders but they never go - middlemen will always be with us. When you get up to the pearly gates there'll probably be an agent there trying to sell you a plot in the best part of heaven.
So, gird your loins, trim your costs and be one of the last men standing.
This is indeed the only answer. It's not about finance availability. Finance is widely available on pre-year-2000 terms (min 10% deposit, sensible salary multiples), which with hindsight was the last time finance was managed sustainably. Bubble finance gave us bubble pricing, and bubbles burst.
I've said it before here, our ability to stay in business depends on how we manage expectations of price decline: the HPC brigade want a huge crash right away, I can't see that happening but we do need to start preparing people for what's coming which is a LONG drift to the bottom (took six years from a much less frothy top in 1989, if anyone here remembers, without any of the QE & negative interest rate shenanigans we are having now).
Smart sellers - and smart agents - will appreciate this and realise that to sell in the current market, you have to be just enough ahead of that decline, so that increasingly savvy buyers won't feel they need to keep waiting for yet more falls.
Please can the media just be positive and accurate and report on the market of NOW not what happened 6 months ago on completions.
I'm sick of trying to convince vendors that they need to reduce when the press are saying"london prices are doing well"...........WELL THEY AREN'T DOING WELL IN THIS LONDON BOROUGH!!!!
Why should vendors drop their prices below replacement cost, unless they really are desperate, just to keep EA's turnover up and keep them in business - as seems to be the thoughts here.
If a market deteriorates the traders go too!
{sobs...}
Deep breath, suck it up and carry on.
I think I'll close down and open up next week as a laundrette (the opposite of what an old boss of mine once did).
Yes prices are 25% too high.
Massive crash or slow decline?
The government has laid in the course of a 10 year slow decline.
Whilst a price crash would help all us agents, in the context of the world financial stage it is a complete non-starter.
Yesterday's Daily Express Front Page:
HOUSE PRICES TO SOAR BY 16%
By a bizarre coincidence, the paper's owner Richard Desmond has a property portfolio estimated to be worth £500 million.
As much as I would welcome RICS, the NAEA etc recommending vendors drop their prices, they are competing with vested interests in this country's media that are saying anything but.
Well said one and all......London isnt the gold mine the press/articles want you to believe. Its very tough here and I dont know 1 agent who is having a good time. Average sale is 5.9 weeks!!! Rubbish. Last summer I agreed the sale of a house @ £440K after this time scale however fell through as the buyer lost his purchaser. The property has been on the market for 6 months and 45 viewings later...not an offer in sight!
well said tony - and that is the information RICS, NAEA etc etc should be saying on press releases to encourage vendors to drop, as many vendors just think we recommend a drop for a quick sale to line our own pockets, i think I'll jump off a bridge if I hear another vendor say 'well I'm in nor rush so I want to ask the higher price' or as i had yesterday a vendor saying 'I'm not giving it away' after I'd received an offer of £390k on his 400k property!
I'm finding the majority of houses selling are those where 3rd parties control asking prices i.e repo's, p-ex's, and the lovely death and divorce cases
"Estate agents will have to chop the prices of properties" Wrong........Sellers need to!
I said I'd stop commenting on your board - but I can't stop myself.
It seems that the penny has still not dropped in the estate agency community.
From the article: “The reason is that there is still a shortage of property on the market, around 50% of its long-term average."
Could the fact that there is only 50% of the property on the market be caused by the fact that new entrants to the market simply cannot afford property at its current prices and recent entrants to the market cannot move up the ladder? Is the person quoted waiting for, miraculously, numbers on the market to double?
From the article:
“Some potential buyers are still being restrained by the inadequate availability of mortgage finance.”
Go on! You don't say! INADEQUATE AVAILABILITY OF MORTGAGE FINANCE or, in other words, MORE DEBT IS THE ANSWER TO THE COUNTRY'S BIGGEST DEBT CRISIS IN ITS HISTORY.
Is this person detached from reality? Doesn't the fact that 75% of young people have given up on owning property ring alarm bells with anyone in estate agency.
Because, as I have been saying for years, current prices are unsustainable in the medium term. In 20 years time no-one will be buying property that would normally have been bought by FTBs. Apart from investors of course. But I get the feeling the younger generation are beginning to wake up to what a mess we've made of things for them.