Sales to first-time buyers have fallen to a three-year low, the NAEA reported this morning.
The Association’s market report for October claims that just 16% of overall sales made last month went to FTBs, down from 22% in September.
This is the biggest slump recorded by the NAEA in nearly three years – December 2008 was the last time agents reported such a decrease, when FTBs made up just 10% of the market.
The number of house hunters registering at branches across the country also fell slightly, with 305 per branch in October compared with 308 in September.
Overall sales remained consistent across the property market in October, claimed the NAEA, with an average of eight per branch. Supply levels remained in line with figures in September, with 72 properties available per branch.
NAEA President Wendy Evans-Scott said: “This week’s housing strategy announcement from the Government is welcome news for first-time buyers.
“But our latest figures show that despite reported increases in mortgage approvals by the larger UK banks over the course of 2011, there is still a lending barrier facing those entering the housing market for the first time.
“To address this, the Government could ensure that banks are given clearer incentives to offer mortgage finance to the UK’s embattled first-time buyers, and also extend the mortgage guarantee for first-time buyers announced this week beyond just new-build homes.”
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Comments
Phil S: Thank you for your honest and well-structured post. I appreciate your taking the time to do so.
For what it is worth, I agree with pretty much everything you say.
I wouldn't even disagree (...much...) with your four examples of winners/losers - certainly not enough to fuel a full-on debate but I'm sure it will end that way regardless... ;o)
In fact, you have clearly, concisely and thoroughly put forward an argument that should make me pick up and bang an identical drum to yours, as you and I have many commonalities it seems.
But I can't.
I can't because it is my purpose not to. I have spent over thirty years in the property industry, both as an Estate Agent and in other associated fields. For virtually that whole period, it has been my job to take a product - in this case a house/flat/bungalow - and to sell it FOR someone TO someone else for the best price I can. The seller has the ultimate say as to if and who... and for how much...the property gets sold - not me. I am just the middle man.
The same goes for pretty much any Estate Agent you care to share views with. That being said, it would make THEIR and MY lives so much easier if property prices halved; quartered - hell - let's have them all down to 1970s levels again! I sold LOADS in 1978 - four bedroom houses at fourteen to fifteen grand a pop. Same ones now are 'worth' well over a quarter of a million...
But, as 'Puzzled...' points out, history is history, and should be left there. We can't look back - just forwards.
Trouble with that, of course, is that you CANNOT 'look' forwards - you can only predict what WILL be there to be seen. The past is there, warts and all, to be seen - and ideally to be learned from.
You relate the selling and buying experiences you have had. More history. Tell you waht - lets ignore our mate and keep on with the past and present theme.
If I understand correctly, you must have initially bought in the late 90s (or possibly before). You then resold in 2009. The property you sold - and the property you went on to buy - roughly tripled in price in that timeframe. That would be right, I guess, give or take.
May I ask, in that period, how did your income fare? I appreciate that in that timespan you almost certainly would have gained promotions etc - but have you, say, doubled your income? Trebled it, maybe? Or what about quadrupled - or maybe even better? The minimum wage has increased by some 68%, and the average salary is about 41% higher (if I read the graphs correctly...). How have you performed in the period?
Now - what about the cost of a loaf of bread?
A dozen eggs?
A gallon of petrol?
Or a gold necklace?
How much have they risen in the same time period? What percentage increase?
I look forward to continuing this discussion.
@PeeBee
Happy to enlighten.
In my last post I hinted at the fact that I'd been affected by scenario no 2.
In 2009 (against my better judgement and following tremendous pressure from my other half!) I sold my semi for £150k and purchased a larger detached house for £300k. Ten or eleven years prior to this these houses were priced at £50k and £100k respectively and the cost to upsize would therefore have been £50k. It cost me £150k, plus £9000 in additional stamp duty and estate agent fees.
I might have made £100k 'profit' on my house but had to pay an additional £200k for the new one - net 'loss' of £100k.
In addition, I do have children so in future they (and I, no doubt) will be affected if house prices stay at an elevated level.
The way I see things is that :-
1. A current homeowner who chooses not to move is unaffected by house prices changes as he needs somewhere to live.
2. A current homeowner who chooses to upsize (like myself) loses when prices increase because the gap gets bigger.
3. The FTB is the worst loser of all as he faces trying to find a decent deposit for a high priced house (at least the upsizer like me has equity to secure a low mortgage rate).
4. The only winners are the downsizers and BTL (who can charge more rent as FTB are locked out)
Phil S: I'm gonna surprise you with my next three words.
You are correct.
OF COURSE you are correct - you are quoting hard and fast data backed up by economics. A "science" by definition.
But - and this is a BIIIIIIIG 'but' - for Jo Public, there is NO SCIENCE involved in the decision-making process to buy or sell their current or next home.
Sellers and buyers (I STILL like those words far more than 'vendors' and 'purchasers'...) in the main employ NO logic and NO common sense - they just 'decide and do'.
And THAT is where ALL the HPC and anti-purchase arguments fall flat. Currently to the tune of several hundred thousand examples per year, people are peeing on this firework of logic - and buying and selling houses.
But - it's not all mutual head-nodding here, matey. I would take you slightly to task over your scenarios as follows:
"1. He moves to a similar priced property he hasn't gained a bean as this profit has been on paper only."
Strictly speaking, true. HOWEVER... had he not bought his present property when he did, then he may well not have been able to then 'afford' the new one. Therefore the "paper profit" you refer to actually has substance.
"2. He moves to a more expensive property then he has actually lost out because the gap between his old house and the new will have got much bigger over the years."
Again, strictly speaking, true. HOWEVER... "the gap", of course, is relative assuming the area that the present and future homes are in similar locations and have fared equally in the market. If BOTH have, say, doubled in price, then the 'gap' by virtue has doubled also from what they were to what they now are. And if he had not bought his existing property in the first place - then there would be no "gap" - just the 100% price to now pay. As it is, you are paying only the increase plus the percentage of the increase.
I would call that a "gain" - not a loss, as you would...
Surprisingly, you omit the third scenario - which I am sure was totally inadvertent - so I will take it upon myself to right this for you...:
"3. He sells his existing property and buys a less expensive one. The gap between the price of his old home and the new one has increased as property values have risen. He is now in a position where, having bought his new home, he has a chunk money in his pocket."
Never let it be said that I wasn't helpful... ;o)
I don't believe for one second that you are stubborn, dense or anything like, Phil. I don't believe I am stupid either - or that my financial acumen is in question here.
I WOULD like to know, however, what thought process is driving a current homeowner to take a HPC-esque view on the market.
* Are you looking to bag a few BTL bargains to top up your looming retirement income?
* Want to buy "larger and more expensive home number 2" and want the gap to lessen a bit so you can breathe a sigh of relief that you played a bit of "win some : lose some"?
* Like me, do you have children who whilst you would dearly love them to own their own homes they are simply priced out of the market due to rising house prices and stagnant economy?
Or is there another agenda?
Come on... enlighten us! ;o)
"Laugh like a rabid hyena on nitrous oxide - because he has heard what Mr Estate Agent said - that his house is 'WORTH' nearly A HUNDRED GRAND MORE than he paid for it? "
PeeBee, I entirely get what you are saying about Jo's £100k 'gain'.
But (and it's a big but), armed with this £100k 'profit', Jo needs somewhere to live.
If
1. He moves to a similar priced property he hasn't gained a bean as this profit has been on paper only.
2. He moves to a more expensive property then he has actually lost out because the gap between his old house and the new will have got much bigger over the years.
Scenario 2 happened to me two years ago.
If you think this plain, common sense logic makes me stubborn or dense then I plead guilty.
Yours,
Phil S
rant: "The stockmarket has delivered very poor returns in recent years after being 'the' choice of investors in previous decades. The reverse is true for gold, which is currently putting in a stellar performance compared to a decade ago."
Matey - NOW you are talking my language! Let's get down & dirty over this one, eh? ;o)
What is the 'value' of a share in a company? Depends on a vast number of factors - although of course it should ONLY be affected by the company's performance in relation to target and profit forecasts against the stock market and shareholders' expectations.
GOLD, however, is a different matter, though, isn't it? People mine it; prospect it; extract it. There is a cost element in finding it; getting it; and turning it into something of value. Not only is there a tangible monetary 'cost' for this process - there is also a human cost. Lives are lost; lives are changed. There is a danger involved which, as the 'easy' gold runs out and whatever is left inside this chemical cake-mix we call Earth is in deeper, and more dangerous places to reach in order to 'make' more, then the cost both in terms of monetary AND human terms rises exponentially.
So - where in this do homes lie? I wanna start with a NEW house, and work backwards from there. Stick with me...
Bricks, mortar, roof trusses, concrete - ALL have a monetary cost. As, of course, does wood. Even though it grows on trees!
You buy all the components necessary to build the house; then pay a group of people to put them all together to form a relatively safe shelter to lay your head down at night. Hey presto - a house. Nothing could be easier or more straightforward - and THAT is the 'value' - is it not?
Ahhh... wait a minute. You need somewhere to actually STAND the house. Gotta buy the land. Some smartass called Twain is credited with saying "Invest in land - they stopped making it a while ago" Daft ha'porth - if he'd kept his big mouth shut, then land would NEVER have increased in value as it becomes more scarce!
THEN you have the 'human' costs (although of course I touched upon them earlier...) Groundworkers; brickies; joiners; roofers; sparks and plumbers; plasterers; painters... all need to get their hands dirty in order for someone to move into a bright shiny new home (note to Phil S - funnily enough, they all earn more today than they did in1989...). Plus Site Management; Admin and Office Staff; Senior Management... they all chalk up a few quid each to the cost. Thankfully, accidents happen less frequently now than in the past - but they still happen. They currently run at a rate of one a week. One too many - and how do you put a price on them? Same as a fitted kitchen? How about a whole house? As far as I am concerned, you couldn't build a house big enough to add up to the loss...
Then the overheads - including all the legislation and EU bo!!ocks - and lastly, the builders profit. Put ALL of that together - and you have THE VALUE of that house. Don't you?
A second hand home SHOULD therefore be 'worth' what it was built for... plus a bit for inflation. But it is not. It is 'worth' what the market will pay for it.
Just like gold.
And with 840,000 sales a year even in the darkest of days... it just shows that some people put VALUE on all of that I have just typed.
Give me a roof over my and my family's heads or a bar of gold to tease, taunt and tickle the market with - I know where I'd be 'investing' my money...
Or, to be factually correct - where I DID invest my money! ;o)
Phil S: "You are being silly. Does the same Jo Public say "I earned £15k in 1989 and earn £30k in 2011, so I'm twice as rich"? NO, because everything costs twice as much hence the value of the £30k has halved and you are no better off than before.
I concede that you are silver tongued but your financial acumen is suspect to say the least."
Sorry? ME being "silly" (ouch - that one really hurts... I'm gonna cry...). MY financial acumen?
You have NO IDEA WHATSOEVER about squat, do you?
Did I say that it was MY view? No. Did I say that I actually subscribe to the idea? No.
Here's the thing. The thing you are either too stubborn; pig-headed or plain too dense to understand - I'll leave you to decide which cap fits...
Mr Estate Agent goes into Jo Public's house. Jo bought in 1989. He (or she - but I will go with 'he' to keep the post SLIGHTLY shorter...) paid £62782 back in the day.
Mr Estate Agent tells him he will now sell at £166597. What does Jo do next?
1. Get out a set of tables which work out inflationary trends in the intervening years in order to work out the 'real-terms' value; to then deduct every last penny he has spent on the property including mortgage payments and the cost of wallpapers long-since stripped or papered over and then to cry into his coffee that it wasn't what he had hoped;
2. Cry into his coffee that if he had only sold it a year or two earlier he might - just might - have got a bit more for it 'cos Mr Estate Agent tells him that prices have gone down a bit;
or:
3. Laugh like a rabid hyena on nitrous oxide - because he has heard what Mr Estate Agent said - that his house is 'WORTH' nearly A HUNDRED GRAND MORE than he paid for it?
(I'll give you a subtle clue. Jo would forcibly shove options 1 and 2 up your tailpipe like a banana...)
"You are simply projecting the past into the future. House prices have had huge rises within 25 year periods in the past - therefore they will in the future. That's your argument.
Mine is, I would say, little more rational...
I take into account the fact that wage inflation for most people is a thing of the past and, in any event, is behind price inflation makig the amount of money available for housing less"
So... am I correct in stating that what YOU are saying is that MOST people are getting - and will continue to get - poorer year on year?
Bread and milk will be less affordable for most people in ten years than they are today; and in 25 years those people will be less worried about a roof over our heads than where the next morsel of food will come from. In theory, they could be trading a house for a square meal.
Lucky for the BTLers that they will have a few less meals to worry about than us then, eh? ;o)
(or has your 'rationality' slipped a bit there...?)
Now - back to your continuing request for me to write the future and validate my predictions.
Here's the thing - call it an admission if you like....
I have NO IDEA WHATSOEVER where the figure of 'value'; 'price'; 'worth'; 'going rate' - or whatever other acronym you would like to dress your argument up in - will be for MY home in ten years from now. NOR, for that matter, do you - or ANYONE else for that matter.
I don't even know if it will still be standing, so how could I possibly predict?
That doesn't mean I can't stick a tenner on the chance of it happening though...
Why gloat at such a stat? shame on those that do.
That means that a similar number trapped either renting and throwing money away, or having to stay at home and not set up their own. Either way, very sad, but these are the time we live in.
The BOMAD have been willing participants in the housing Ponzi scheme because they saw their own properties produce financial returns well in excess of inflation.
However, as has been pointed out, just because an asset has performed well in the past, that is not a guarantee that it will do so in the future. Indeed, the opposite is quite often the case.
The stockmarket has delivered very poor returns in recent years after being 'the' choice of investors in previous decades. The reverse is true for gold, which is currently putting in a stellar performance compared to a decade ago.
WELL SAID PUZZLED.
@PeeBee
" I am referring to Jo Public - who BOUGHT at £62782, and can now SELL at £1665897. They don't give a fuppeny tuck about "correction for inflation". "
You are being silly. Does the same Jo Public say "I earned £15k in 1989 and earn £30k in 2011, so I'm twice as rich"? NO, because everything costs twice as much hence the value of the £30k has halved and you are no better off than before.
I concede that you are silver tongued but your financial acumen is suspect to say the least.
Pee Bee: 'In the meantime, I'll put another tenner on the value of my house being more than it is today.'
Interesting that you use the phrase 'value of my house' - because I reckon you'd lose your money.
If you had said the 'price of your house' - I'd agree with you. But the 'value' of your house. Well, how does one begin to measure the value of your house.
Some anal equation involving average wages / average prices / average interest rates .... the value, of course, of it keeping the rain off would be the same (maintenance costs there though!) .... hmmm, all in all, looking around the world today - the stagnation in wages - the pressures of globalization - the de-skilling of the workforce ... the massive amount of money lent into the housing market over the last 10 years ... the inability of most of the following generation to afford current house prices ... I'd say it was a pretty fair bet that the value of your house in 10 years time will be the same as, or less, than it is now.
You are simply projecting the past into the future. House prices have had huge rises within 25 year periods in the past - therefore they will in the future. That's your argument.
Mine is, I would say, little more rational. Yes we have had big house price rises in the past. Driven by high inflation and periods of loose credit. But I take into account the fact that the world has changed. You don't. I take into account the fact that wage inflation for most people is a thing of the past and, in any event, is behind price inflation makig the amount of money available for housing less. I take into account the fact that we have just had a massive and prolonged period of loose credit (up to 2008) and that, particularly in areas of the country where prices went up by a factor of 5 or 6 (the terraced housing stock in the North, for example) - the possibility of these houses going up in VALUE over the next 10 years is - well I'd say 100 to 1 against.
I wouldn't be daft enough to mix up trying to predict who will win the FA Cup in 10 years time with looking around at what has happened over the last 20 years to our economy and coming to some rather simple conclusions about what is likely to happen in the future.
Instead of (frankly daft) comments about my crystal ball, why don't you present a coherent set of reasons why you think in 10 years time the VALUE of your house will have gone up. A step by step account of your thinking to justify that postion would be interesting.
If your answer is simply that 'well they went up in the past so they'll go up in the future' - I'm afraid your post will have to be marked 'not thought through, must think deeper'
"1. You are very conveniently forgetting to correct for inflation.Nationwide figure for last high Q3 1989 of £62782 is £127822 in real terms, meaning the Q3 2011 figure is just 30% higher, not 165%!"
I am referring to Jo Public - who BOUGHT at £62782, and can now SELL at £1665897.
They don't give a fuppeny tuck about "correction for inflation".
2. "I said buy low - NOT at the still elevated (by low IR's & QE) 2011 price."
Allow me to correct you. You said " BUY LOW AND SELL HIGH". To which I - perfectly correctly - countered that THE AVERAGE homeowner buys and sells at the same time - therefore your logic is fatally flawed.
3. "Looking at the average house price to earnings ratio also adds weight to the argument that its best to wait."
Zzzzzzzz. Oh... look - EIGHT HUNDRED AND FORTY THOUSAND PEOPLE THIS YEAR disagree with you.
How unfortunate for them that they are all so wrong, huh?
"1. Looking at the nearest 'historical' comparison we have (which has not yet run the whole 25-year cycle therefore not a complete indicator...), the last "high" - Q3 of 1989 gave an average of £62782 (Nationwide figures...). Q3 of 2011 was £166597 - 165% higher than that of 22 years earlier. Using YOUR analogy wold of course be var nigh impossible for the average buyer/seller (being one and the same person...) - as in order to SELL high they then BUY HIGH, do they not?"
1. You are very conveniently forgetting to correct for inflation.Nationwide figure for last high Q3 1989 of £62782 is £127822 in real terms, meaning the Q3 2011 figure is just 30% higher, not 165%!
2. I said buy low - NOT at the still elevated (by low IR's & QE) 2011 price. Last low in Q4 1995 was £50930, but £80136 in real terms. This is a fall in price of either 19% nominally, or 37% in real terms compared to Q3 1989. Either figure proves you can buy low.
3. Looking at the average house price to earnings ratio also adds weight to the argument that its best to wait. The average ratio since 1983 is around 3.5 but its been above 4.0 since the massive bubble started in 2003. Its currently 4.4 and corrections tend to undershoot so there is some way to go yet!
Good things come to those who wait.
Spain prices were built on nothing and have already crashed. The UK market is somewhat more balanced and built on reason. I feel sorry for those not able to afford to buy, so you have to rent, but peolple do want to buy and always will, what ever twaddle you post in some futile belief you can talk the market down!
Phil S: "The trick with any asset is to buy low and sell high, not the other way round. Dooh!"
That is true. HOWEVER...:
1. Looking at the nearest 'historical' comparison we have (which has not yet run the whole 25-year cycle therefore not a complete indicator...), the last "high" - Q3 of 1989 gave an average of £62782 (Nationwide figures...). Q3 of 2011 was £166597 - 165% higher than that of 22 years earlier. Using YOUR analogy wold of course be var nigh impossible for the average buyer/seller (being one and the same person...) - as in order to SELL high they then BUY HIGH, do they not?
2. That is looking at a property as an "asset", and not simply as a roof over ones head. Had this argument far too many times to start it again. I was simply answering a point made by another poster - NOT giving investment advice.
"Hmmm... please explain to me why would someone who encourages their own children to invest in a product that HISTORICALLY has multiplied in value by a factor of anywhere from FIVE to TWELVE (just by a quick look...) over the timescale it is being bought within, be regarded as "barking mad"?"
Because they are now massively OVERVALUED. The trick with any asset is to buy low and sell high, not the other way round. Dooh!
Rick Deckard: I doubt very much that I am th only one to figure out that there are simply too many people and not enough money and resource to make all bunnies happy bunnies. Greed starts wars, not just riots.
There are governments and factions working on the horrifying - but effective - solution EVERY DAY, I am afraid... Just open the papers or watch the news.
I worry for our children and our children's children. But who owns the roof over their heads is not the reason.
Puzzled...Puzzlled...Puzzled...
I admire your resolve, in the face of overwhelming evidence, to refuse to admit that you fired the first shot.
Tell you what - let's forget history, eh? History only tells you what HAS happened; not what WILL happen - that's your slant on things, innit?
Okay. So - as YOU and only YOU seem to have the divine crystal ball that can see this future you refer to - please tell me who will win the 2019 FA Cup so I can put my tenner on them now! Or what about the 2036 World Cup Final - teams, score and scorers, please? That should get me decent odds - seeing as most of the players won't even be born yet!
In the meantime, I'll put another tenner on the value of my house being more than it is today.
( Nothing like a safe bet on an odds-on favourite - and even if I only get evens I'll win back HALF the money you lose me... ;o) )
Pee Bee - what are you talking about? You said I 'started the historical shenanigans' ... no, what I said in my first post was ...
"The problem is not mortgage availability - you'd have to be barking mad to encourage a young person (your son or daughter perhaps) to take on a 100% mortgage at historically very low interest rates to buy houses at historically high prices. What happens when interest rates go back up? Economy trashed, unemployment, repossession etc. etc. Are you of the opinion that interest rates will be this low for the next 25 years?"
... that house prices are HISTORICALLY HIGH NOW - that, compared with the relationship between earnings and house prices they are now, compared with the past, high.
You started the 'historical shenanigans' in your post at 11.52 where you said ...
"Hmmm... please explain to me why would someone who encourages their own children to invest in a product that HISTORICALLY has multiplied in value by a factor of anywhere from FIVE to TWELVE (just by a quick look...) over the timescale it is being bought within, be regarded as "barking mad"?"
You are the one who was making the point that because houses have gone up in the past - why shouldn't one assume they will go up in the future. I merely pointed out that as house prices are now very high - compared to current earnings and the relationship between earnings and prices in the past - and that currently interest rates are low (again, compared to the past) you'd have to be barking mad to encourage someone to buy now - if you are buying with the expectation that house prices in the next 25 years are going to do the same as they have in the past.
They aren't - globalization means low wage inflation - one of the principal driver of previous house price rises. The other driver of previous house price rises - an increase in the cost and availability of credit - well I think we all know another credit boom won't be happening for a generation.
@PeeBee
I take my hat off to you as the only person that has come up with the final piece of the puzzle that hasn't been discussed that has a major contribution on house prices.
Just like an overtired 8 year old on boxing day fuelled on cheap additive filled junk food and underdelivered christmas promises - faced with the bare truth that they are going to lose the family game of monopoly to their sneaky cheating older uncle - human nature takes over and with uncontrolled primate nature the board is thrown up into the air - scattering all the little pieces to all four corners of the room - thus preventing the clever adults (and banker) achieving their well thought out strategy with a slapped backside and early bedtime. o.O
What you are saying, and please correct me if I am wrong, is that there is a direct correlation between civil unrest ie riots and a substantial negative affect on house prices?
Maybe the government have got this all wrong then - maybe the only way to kick start the economy is to piss the masses off so much in the country, so much that they will fight and riot for what are after all maslows hierarchy of basic needs for human beings - food shelter and love.
This just wouldn't happen (again) would it?
Puzzled... - let's agree on ONE thing, eh?
YOU STARTED the 'historically' shenanegans - NOT ME!
(have a check back - post #6 at 09.50. I didn't jump in - or on - until post #11 at 10.59...)
"You are just trying to defend an indefensible position by trying to twist my argument. It won't work I am afraid. My meaning was clear."
And THAT'S why YOU needed to defend your position, I take it?
Sorry - did I twist your argument again? ;o)
Rick Deckard: "out of interest then why are high prices good for the economy and the greater well being of your fellow man? Come on spill the beans and give me and Puzzled 10 reasons why high house prices are good for the UK economy"
Sorry? Have I EVER said - on this site or anywhere else - that "high property prices are good for the economy"? Or, for that matter, that they are 'good' for ANYTHING or ANYONE?
You confuse fact with your opinion of fact.
My PERSONAL feelings on the matter are of no consequence here. IF they were, then I would be rant's best mate - as I would do a far better job of TALKING DOWN the market than var nigh anyone else has so far managed!
I have NO HIDDEN AGENDA - mine is completely out in the open.
There are MILLIONS of property owners who need to achieve the best possible price for those properties.
Those whose JOB it is to facilitate that - they simply do their job.
And THAT is why HPCers and ANY Estate Agent worth their salt will never see eye to eye...
With regard to your example of a 'non-investment' - there's always ONE. Congratulations finding it.
Here - I'll give you a few to add to the list - cos one is a pretty cr@p basis for a sensible argument innit?
West End of Newcastle
New-Build (1880-1940)
Flats; houses; maisonettes
Sold NEW for roughly £300 average per property
Resold many, many times during war, peace, famine and feast.
THEN...
1991 - Benwell Riots.
Property values dropped... just a bit.
One property - which would have been 'worth' around £25,000 prior to the bother - sold for £1. YES - ONE POUND. Better even than the Ginza District's 99% crash. This one achieved 0.00004% of its 'previous value'. Others sold for hundreds; some as much as a grand. I actually made the local press - selling a repo for eight hundred quid and my Fee for selling it was £1200!
Believe me... we deserved EVERY PENNY of it - and more!
So - there are HUNDREDS there for you to add to your own paltry list of one. Don't say I never give you anything...
NOW? Oh - they're selling for roughly forty... maybe even fifty grand a pop. But I'm sure you'll not want to quote me on that wee factoid... ;o)
Ray Evans: "The wish to buy is still there to buy. What is not there is the availability of a mortgage with a reasonable deposit and at a reasonable rate so the stats for FTB purchases reflect this."
What is not there is the availability of a mortgage with a reasonable deposit and AT A REASONABLE RATE ... I questioned your assertion that mortgage rates are not reasonable?
Why did you say I misunderstood what you wrote. What you wrote seemed pretty clear to me.
A pleasant weekend to you too.
PeeBee: Puzzled...:
Talk me through this, please...
In one post you refer to HISTORIC information;
In the next you say "...the world has changed".
Some consistency in your argumental processes might be a good plan...
Oh come on, you can do better than that. Can't you? YOU are the one who started off about historically house prices going up by a factor of 5 and 12 during a mortgage - so what would be wrong with encouraging someone to take on a 25 year mortgage now - on the basis that what has happened in the past will probably happen in the future. That WAS the point you were trying to make, was it not?
I said, in RESPONSE to your projection of historical data that the world has changed so projecting the past 25 years into the next 25 years is really not a sensible thing to do.
So, no inconsistency in my argument. You are just trying to defend an indefensible position by trying to twist my argument. It won't work I am afraid. My meaning was clear.
Blimey,
The world seems to be full of two types of people. There are people that can and will buy / already do own a house and there are those that can’t or won’t / don not own a house and people on each side of this are at different levels on the newly created ‘Jonnie Happy Scale’
Im sure (know) that there are numerous home owners out there that really should be selling and accept that they can’t really afford it anymore – 1 on the happy scale
Then there is those that can afford their house and don’t want or need to move and wont – these are usually at the top of the happy scale – call it happy factor 10
And the same applies with renters – some love the flexibility, the fact that they can rent a bigger / better house than they could buy and the fact that when the boiler goes pop a man comes to mend it and gives the bill to someone else and they never even see it. They couldn’t buy any way as they have a corking social life, holidays, decent motor and spend all they earn and don’t care – happy level 10
But, you then have the other end, in rented, really want to buy, even have a deposit and costs sat in the savings account but cant as they are waiting for a huge drop in prices and these bloody 2% a year things are not helping the happy scale rating, they want / need / desire 20, 30, 40, even 50% and its not been happening, and they are forced to keep renting and because they are saving they are renting a small place as its ‘only temporary’, so they haven’t even bought a sofa for it and properly settled in as they expect that very soon they will be moving on to a house they want, and their Mrs wants, in the area the kids schools are in at a big discount on 2007 prices………………….but its not sodding working that way!!! AARRRGGGGGG! And they are cross and peeved off and on happy level 1.
…………..poor sods.
Jonnie
P.s – there is another happy scale for EA’s but ive gone on enough so another time for that
@Rick
I disagree, buyers can offer what they like, but only vendors can decide to accept or not. Who has the control??
Anyway you missed the point of my post, it wasn't about buyers/vendors, it was about who makes the house prices go up or down. Estate Agents are the first to be tarred with the greedy asking price brush, but do they own the houses and have control on what offers to accept? No. The owners do. That was my point.
For anyone who wants to shoot me down in flames, the answer is 14, go fill your boots....
HAHAHA I hope you lying EA's all rot in your BTL houses and no one finds you all alone and no one wants to be your friend any longer after lying to your family and getting them into more debt.
You had your chance now suffer
@I've lost my Friday Feeling
re :to mr anoymous, who thinks greedy estate agents killed the market....
Clearly you've never bought/sold a house or you would realise it's the vendor who ultimately decides what price to market at and what price to sell at.
NO NO NO - it is actually the BUYER who ultimately has control and this is where you are all going wrong - the property is only worth what someone else is prepared to pay for it. In a market awash with cheap credit the price kinda goes up and in a market with no money to purchase it goes down the only other variable is supply and demand - its really really simple chaps - honest even a kid can do the math.
@PeeBee I did say "sounds" like - out of interest then why are high prices good for the economy and the greater well being of your fellow man? Come on spill the beans and give me and Puzzled 10 reasons why high house prices are good for the UK economy
@PeeBee @Puzzled
New build 2 bed flat is sold at £86,000 in 1988
Re-sold for £44,500 in 1994
Valued in 2007 at £144,500
Now on the market 2011 (WTF 23 years later!) offers between £80 -90,000
I dont see this an investment if bought at the "height" of either of the market cycles do you ?
Puzzled...:
Talk me through this, please...
In one post you refer to HISTORIC information;
In the next you say "...the world has changed".
Some consistency in your argumental processes might be a good plan...
Rick Deckard - "@PeeBee you sound more like some BTL investor who is overgeared and worried that the market is about to crash bigstyle. "
'Sounds' can obviously be deceiving then.
'Listen' more carefully next time...
"In some parts of the country prices have fallen a bit - but whether, say in Newcastle, where many people earn 14k, prices are now sensible is another matter"
There are many people here in Newcastle who earn six and seven figure salaries. I know "many" of them.
Whether or not I am one of them - or one of YOUR statistics - is irrelevant.
Minumium wage is minimum wage; and "the going rate" for a job is the going rate WHEREVER you care to live, Puzzled...
We of the "flat cap and Woodbines crew" no longer believe that the streets of 'That There London' are paved with gold and that even the taxi drivers are millionaires.
Don't you worry your little head over us in Newcastle. We're managing quite fine by ourselves, thank you. ;o)
And as far as your questions - well, I would be a liar or a fool if I said that interest rates (or, more relevant, mortgage rates) were going to be static for the next quarter century. The historical 'norm' we always quoted during the 70s, 80s and 90s was 7%. I would say that a return to somewhere near that levels would be 'more than probable'. As to what, in MY opinion, borrowers should do in order to be 'ready' for such - or even for your 10% possibility (Hell - let's go 15.4 like we had for a day or two 'back in the day'...) the answer is simple:
DON'T BORROW WHAT YOU CAN'T AFFORD TO PAY BACK.
Of course, in order to 'protect' against future fluctuations, potential homebuyers could fix the period of their mortgage for anything up to the full term of the loan. But I am not qualified to give financial advice, so I obviously couldn't and wouldn't advise anyone to do this without seeking proper, independent, advice.
Back to that asteroid I posted about earlier in response to rantnrave - the one that had an encounter with Jupiter. You have to take a view on life - or just watch it go by. Every time you cross a road there is a POSSIBILITY that a bus that you hadn't noticed will knock you down. So - do you stay on the path, never reach the other side - or do you take your life into your own hands, take a risk, and step off the kerb?
Like me, Puzzled... - YOU STEPPED.
to mr anoymous, who thinks greedy estate agents killed the market....
Clearly you've never bought/sold a house or you would realise it's the vendor who ultimately decides what price to market at and what price to sell at. All estate agents can do is provide advice on what other comparable properties have sold for and therefore what theirs is likely to get.
BIG SIGH......
@Puzzled of Tunbridge Wells.
You misunderstand the content of my post and read into it what is not there..
You are wrong in almost every respect. So much so that I cannot be bothered to enter into any further debate on this subject with you.
However, I respect your right to your views and wish you a pleasant weekend.
In ten years I would be able to buy the property outright.
As some one said below, there are good share buying opportunities about at moment and in future. Not to mention gold and silver.
Over-valuing EA's have killed the goose that laid the golden egg.
Awww its gunna be a lean christmas at the estate agent house this year :(
The deadcat bounce in house prices is complete, now for the plunge xD
Time to file those estate agent qualifications away and apply for a job in Greggs guys.
You will be saying the same thing in 10 years time. Just as those who were saying house prices in 1980's were too high.
PeeBee: "Hmmm... please explain to me why would someone who encourages their own children to invest in a product that HISTORICALLY has multiplied in value by a factor of anywhere from FIVE to TWELVE (just by a quick look...) over the timescale it is being bought within, be regarded as "barking mad"?"
Because, in case you had not noticed, the world has changed. When people bought in the 50s, 60s and 70s globalization had never been heard of. Pension funds invested in shares like BP, British Telecom and Marks and Spencer. And those shares went up, as a result largely of inflation and growth. Now we live in a world where the FTSE is 1500 below the highs it reached in 1999. We have had two credit booms and busts in the last 20 years. Wages no longer go up with (globallly affected and controlled) prices. This is a new ball game. Billions have been lent into a property market which has turned into a house of cards. And turned our economy into a house of cards too.
So, anyone who thinks the next 25 years is going to be a happy repeat of the last 40 years - with increased debt and inflation causing house prices to multiply and inflate the debt away that is used to buy them is, as I said, barking mad. You only have to think a little bit about what is really going on in the world around you to realise that what I have said is true.
Once upon a time inflation would have saved us. When we now compete with the billions in China and Asia - wage inflation is just not going to happen any time in the next 20 to 30 years.
So, sitting there kidding yourself that 'property doubles in price every 7 years' is, at best, delusional. It hasn't doubled in the last 7 years (Land Registry figures show property here is the same as it was 7 years ago - and in many parts of the country is lower). A generation is priced out - a million kids between 16 and 25 are unemployed - including many graduates - many FTBs are in the late 30s or early 40s. It certainly isn't going to double in the next 7 years - or the 7 after that.
@PeeBee you sound more like some BTL investor who is overgeared and worried that the market is about to crash bigstyle.
The simple fact is there is nothing left the market has been propped up on a wing and a prayer with just prime central london pulling in wealth from the eurozone - even this is failing - ;)
Economics will ALWAYS win in the long term over government policy.
You have to remember its not who plays in the game but who owns the monopoly board at the end of the day - they have the power to sweep off all the little green and red houses collect all the money in and fold up the board and put the game awayand that is what's happening right now in this cycle.
PS FTB's just need to sit tight and watch it bottom out not throw their hard earned deposit into the box just as the lid is about to close.
Mr cloned FTB you obviously did not learn much at your school as no doubt it was one of the approved type.
Listen you dimwit FTB's DO NOT LEND they actually BORROW. That's why we have lenders and borrowers in society.
It's really simple, (but then you are less than simple as you have clearly shown), for simplicity those who have LEND and those who don't BORROW.
The rest of what you said is just drivel. Get a life.
P.S. I am surprised you were able to post this message as we all have to have the ability to add up before we can post on this site. Did you get your mum to help?
Most of my deposit is sitting with NS&I earning 6+% tax free. When the Euro implodes and the FTSE falls towards 4000, I'll hoover up a load of cheap shares. So many better opportunities than UK property.
Try this C & P FTB Dan,
over and over you don't get the point of HOUSES
I suspect it will be a long time before you see the significant gains associated with a bull market (as FTB Dan would call it). So your main consideration should not be: 'Will I make money out of this?' Rather you'd be doing something quite 'old fashioned'. You'd be buying a house not as a speculative asset but as somewhere to live.
Not my words, but they apply to you.
What kind of knob end FTB would dive in now? Prices have been falling for the best part of 4 years and continue to do so. It is much more probable that they will fall much further rather than rise. I mean, jeez, the Euro area is likely to plunge into recession/depression next year.
Please EA's, other than tired old "miss the boat" type cliches, why would an FTB buy now?
“Hmmm... please explain to me why would someone who encourages their own children to invest in a product that HISTORICALLY has multiplied in value by a factor of anywhere from FIVE to TWELVE (just by a quick look...) over the timescale it is being bought within, be regarded as "barking mad"?”
A matter of perspective perhaps. You could measure a very large number of assets in this way, oil, gold, timber, sugar etc etc. All have risen very strongly over the years. Another way of looking at it is that it is money itself that has been losing value over the same period as governments print more and more money out of thin air.
Now of course from a tax perspective a main home is pretty efficient. And of course all this newly printed money should find its way into wages eventually. But for now money is being diluted by printing (or QE), the currency is being trashed so imports like food and energy rise and wages are going nowhere. All the money is going into banks, and government, but not to the average man.
I don’t doubt you are right peebee, but the question really is when will all this new money be reflected in wages and in turn, higher house prices? My personal opinion is that will take a good few years yet, maybe a decade. For these reasons I expect a bit more by the way of falls next year.
Well I am continuing to get get my friends on this first time buyer strike. They can see houses falling in value, European problems, wage freezes. In fact we are now having saving competitions, who can get the best account, who put away the most money this month etc.
When house prices fall to affordable levels I will jump in. Why should we pay for some one else's negative equity.
Political Philosophies Explained in Simple Two-Cow Terms
SOCIALISM You have two cows. You keep one and give one to your neighbor.
COMMUNISM You have two cows. The government takes them both and provides you with milk.
FASCISM You have two cows. The government takes them and sells you the milk.
BUREAUCRACY You have two cows. The government takes them both, shoots one, milks the other, pays you for the milk, and then pours it down the drain.
CAPITALISM You have two cows. You sell one and buy a bull.
CORPORATE You have two cows. You sell one, force the other to produce the milk of four cows, then act surprised when it drops dead.
DEMOCRACY You have two cows. The government taxes you to the point that you must sell them both in order to pay the taxes to support a man in a foreign country who has only one cow which was a gift from your government.
Change of name.
Wont Ever Buy Dan
FTB Dan and PeeBee, a match made in heaven??
"Take a positive from it. You obviously have rattled a cage or two."
Indeed, to borrow the phrase from bomber command, if your are not taking flack your not over target!
I see that you yourself have suffered a bit of cloning from time to time.
Puzzled...: I've know I've already had one pop - but I've been thinking deeper about what you said. Thanks for making my brain hurt, by the way... ;o)
You said "...you'd have to be barking mad to encourage a young person (your son or daughter perhaps) to take on a 100% mortgage at historically very low interest rates to buy houses at historically high prices."
Hmmm... please explain to me why would someone who encourages their own children to invest in a product that HISTORICALLY has multiplied in value by a factor of anywhere from FIVE to TWELVE (just by a quick look...) over the timescale it is being bought within, be regarded as "barking mad"?
Sorry missed a letter out of the address;
http://epetitions.direct.gov.uk/petitions/459
The mortgage lenders, after being bailed out by the taxpayer, are now seriously affecting the ability of our children to buy their own homes, by not lending at reasonable interest rates to those who have limited deposits. This is creating even more inequality in our society between the have access to funds and have not. Is it not time this was debated in parliament. How much would 95% mortgages at reasonable interest rates do for both our industry and the economy in general. I urge everyone reading this to join our e petition to the government.
http://epetitions.direct.gov.uk/petions/459
Pee Bee - you responded to my comment about historically high prices and said 'what about the last 4 years' - in the most densely populated part of the country -London, Home Counties - prices have barely budged - gone up, if anything, in London. In East Anglia and the South and South West property has not budged significantly. In some parts of the country prices have fallen a bit - but whether, say in Newcastle, where many people earn 14k, prices are now sensible is another matter. 2 up 2 downs that were 15k in the late 90s went up to £120k by 2007. If they are down to £80k now - that's still 5.5 times the average wage - at rock bottom interest rates.
Please respond to this:
Are you of the opinion that interest rates will be this low for the next 25 years?
And, if not, what precautions should young people thinking about buying now take to protect against the possibility of, say, 10% mortgage rates at some time during their mortage period.
FTB Dan. If a post bothers you, report it. From previous experience, the more you go on about it, the more it will happen.
Take a positive from it. You obviously have rattled a cage or two.
Puzzled...: "you'd have to be barking mad to encourage a young person (your son or daughter perhaps) to take on a 100% mortgage at historically very low interest rates to buy houses at historically high prices."
Sorry - historically high prices? Only if you COMPLETELY WIPE the last four or so years from the history books, surely?
Rantnrave: "House prices in Northern Ireland have halved from their peak"
I will regurgitate my oft-used phrase - the one you quoted last...
SO WHAT?
A lump of rock the size of China collided Jupiter at a squillion miles per hour in 2009. Should we all be cr@pping bricks over THAT headline as well?
I'm going home to hide under the kitchen table - just in case...
Obviously it is 'Funny Friday' EAT give us a RM story and HPC story, it gets the juices flowing.
I dont think many people will think that was you posting Dan.
Only the HPC mob would think it a good idea to substitute a few people being locked out of the housing market through higher prices, with an entire generation being locked out of the housing market and forced to enrich their landlords through mortgage rationing.
Genius.
Predictable.... my username has been cloned, the post at 06:09:50 is not mine. Some very sad individual feels the need to clone my name, then attempt to turn insult as many people as possible.
Whoever you are coward, if you have something to say about me come out and say it under your own name.
Ray Evans: "The wish to buy is still there to buy. What is not there is the availability of a mortgage with a reasonable deposit and at a reasonable rate so the stats for FTB purchases reflect this."
Are you saying mortgage rates at the moment are not reasonable? You want to see them higher? Or is a bank base rate of 0.5% and mortgage rates of between 2% and 6% (depending on circumstances) not reasonable enough. Are you saying mortgages should be available at the more reasonable rate of say 2%? Should savers receive even less interest on their savings?
Should a bank risk its savers' money by lending 100% of the purchase price of unsustainably highly priced houses?
Surely, it is simply time to accept that with bank base rate at the lowest for 300 years and house prices so high young people are priced out until, apparently by some miracle they can buy in their 40s, the simple FACT is that HOUSE PRICES ARE TOO HIGH.
The problem is not mortgage availability - you'd have to be barking mad to encourage a young person (your son or daughter perhaps) to take on a 100% mortgage at historically very low interest rates to buy houses at historically high prices. What happens when interest rates go back up? Economy trashed, unemployment, repossession etc. etc. Are you of the opinion that interest rates will be this low for the next 25 years?
Can always rely on a cut and paste from little rantrave. Thanks for adding.................nothing again and again and again.
Mate- just reflect, your key board cut and p, is chnaging nothing.
You need to calm down, lose the anger,it will bring about an early grave for you. Try to look on the positive in life.
House prices in Northern Ireland have halved from their peak
...
"But our latest figures show that despite reported increases in mortgage approvals by the larger UK banks over the course of 2011, there is still a lending barrier facing those entering the housing market for the first time."
Wendy on message here - DONT MENTION THE PRICES!
FTB Dan. Calm down mate you will die long before your fist shave with such anger.
Cheer up the government are trying help you guys with the new initiative for the long term unemployed young you will soon be able to get a job. The whole world will look so much better to you when you are contributing, not taking from society, may I wish you the best of luck.
There is nothing surprising in this,
There is of course a massive downside at the moment - lack of secure (ish) jobs
The wish to buy is still there to buy. What is not there is the availability of a mortgage with a reasonable deposit and at a reasonable rate so the stats for FTB purchases reflect this.
What is needed is to get the country back to WORKING & PRODUCING GOODS (not more shelf stacking or services)
@FTB Dan. for you to be right prices would have to at least halve to make a real difference to the amount of deposit required at the moment by a FTB. I do not think that will happen.
Ah ha! There it is in black and white. I am right and all those idiot EA's who challenge my wisdom and insight are wrong. FTBers like me are not lending the expensive money to buy the expensive houses. We are killing the demand factor, so prices must drop. I will be the champion of HPC'ers. You will all see just how right I am next year as your industry implodes. If you go out of business I guess you won't post here any more. I love being right about everything, it is my personality. I love it more when the stats show I am right and EA's are all idiots.