How far will house prices fall [volume 4]

[TTwiggy]

p1stonhead said:

VX Foxy said:

loafer123 said:

I am pretty well connected in the property market, and I wouldn't hang about if I were you.

Feel like expanding on that?

A few of people I know who invest heavily in London property think it is very undervalued at the moment and expect swift rises from straight after the election to perhaps a year after depending on who gets in.

I recently sold a 'classic' BTL property in London (Zone 2, next to the DLR and 7 minutes into Canary Wharf). It was on the markey for four days before an offer at the full asking price was put in.

[Mr Whippy]

TTwiggy said:

p1stonhead said:

VX Foxy said:

loafer123 said:

I am pretty well connected in the property market, and I wouldn't hang about if I were you.

Feel like expanding on that?

A few of people I know who invest heavily in London property think it is very undervalued at the moment and expect swift rises from straight after the election to perhaps a year after depending on who gets in.

I recently sold a 'classic' BTL property in London (Zone 2, next to the DLR and 7 minutes into Canary Wharf). It was on the markey for four days before an offer at the full asking price was put in.

Heavy investors think prices can only go up. What ever can go wrong with that self fulfilling prophecy outlook

7.5yr rhymes

[Croutons]

No idea what they have accepted, but this sold for £535k a year ago, was let, precisely no money has been spent and a lot of problems have been uncovered, and at £625k it lasted less than a week, so I have no doubt it will have been close to ask. I think this % is largely the exception, not the rule, even in prime Bristol, but with no sign of demand falling, there are buyers aplenty...


http://www.rightmove.co.uk/house-prices/detailMatc...

[z4RRSchris]

p1stonhead said:

A few of people I know who invest heavily in London property think it is very undervalued at the moment and expect swift rises from straight after the election to perhaps a year after depending on who gets in.

I invest a little bit, and would say the above isn't what I have heard from any other developers or investors. Sites are massively overvalued

that said still people out there, Mr Ashley just bought a site, exchanged and completed in a day for £200m!

[menousername]

Croutons said:

No idea what they have accepted, but this sold for £535k a year ago, was let, precisely no money has been spent and a lot of problems have been uncovered, and at £625k it lasted less than a week, so I have no doubt it will have been close to ask. I think this % is largely the exception, not the rule, even in prime Bristol, but with no sign of demand falling, there are buyers aplenty...


http://www.rightmove.co.uk/house-prices/detailMatc...

Something seriously wrong when a house in Bristol sells for that much full stop, let alone an end of terrace in need of work

[DoubleSix]

menousername said:

Croutons said:

No idea what they have accepted, but this sold for £535k a year ago, was let, precisely no money has been spent and a lot of problems have been uncovered, and at £625k it lasted less than a week, so I have no doubt it will have been close to ask. I think this % is largely the exception, not the rule, even in prime Bristol, but with no sign of demand falling, there are buyers aplenty...


http://www.rightmove.co.uk/house-prices/detailMatc...

Something seriously wrong when a house in Bristol sells for that much full stop, let alone an end of terrace in need of work

Eh?

Many houses over a mill in that part of the city, do you know anything about Bristol??

[menousername]

DoubleSix said:

Eh?

Many houses over a mill in that part of the city, do you know anything about Bristol??

Yeah... Its overpriced

[Mr Whippy]

menousername said:

Something seriously wrong when a house in Bristol sells for that much full stop, let alone an end of terrace in need of work

Could have sunk lots of cash into it too.

In the end though, cheap credit is letting people go mad and lenders, despite new rules, are still eager to let you borrow more than seems reasonable and safe given the general outlook.
But with big deposits to cover their potential losses in a down turn I suppose they don't care.
But if rises continue, the distance they can fall rises too, leaving them exposed again.

Around here stuff is taking an age to go.

£625, a year later £550, 6 months later £500, finally sells at £475 a few months later.
£725 one took 3yrs to go, finally at £490.
Family members house £615, now at £575 a year later, no go.
Seemingly high volumes going and coming back up for sale again. This is rural areas around west Harrogate... But if anything values are dropping I'd say. Makes you wonder how many are outright owned investment BTLs and they're moving them on now prices are dipping!?

Interesting times.

[sugerbear]

Croutons said:

No idea what they have accepted, but this sold for £535k a year ago, was let, precisely no money has been spent and a lot of problems have been uncovered, and at £625k it lasted less than a week, so I have no doubt it will have been close to ask. I think this % is largely the exception, not the rule, even in prime Bristol, but with no sign of demand falling, there are buyers aplenty...


http://www.rightmove.co.uk/house-prices/detailMatc...

Worth waiting a couple of months and finding exactly how much it did sell for.

[sugerbear]

Croutons said:

No idea what they have accepted, but this sold for £535k a year ago, was let, precisely no money has been spent and a lot of problems have been uncovered, and at £625k it lasted less than a week, so I have no doubt it will have been close to ask. I think this % is largely the exception, not the rule, even in prime Bristol, but with no sign of demand falling, there are buyers aplenty...


http://www.rightmove.co.uk/house-prices/detailMatc...

Worth waiting a couple of months and finding exactly how much it did sell for.

[p1stonhead]

z4RRSchris said:

I invest a little bit, and would say the above isn't what I have heard from any other developers or investors. Sites are massively overvalued

that said still people out there, Mr Ashley just bought a site, exchanged and completed in a day for £200m!

Guy who told me that is real estate investment director for one of the big banks. They want to invest as much as possible because they see it rising steadily v soon. Hope he's right - will help our sales!

[Magog]

p1stonhead said:

z4RRSchris said:

I invest a little bit, and would say the above isn't what I have heard from any other developers or investors. Sites are massively overvalued

that said still people out there, Mr Ashley just bought a site, exchanged and completed in a day for £200m!

Guy who told me that is real estate investment director for one of the big banks. They want to invest as much as possible because they see it rising steadily v soon. Hope he's right - will help our sales!

Frothy PR stuff from CBRE and their stooges at the Telegraph but they might be right.

http://www.telegraph.co.uk/finance/property/115617...

[DoubleSix]

menousername said:

DoubleSix said:

Eh?

Many houses over a mill in that part of the city, do you know anything about Bristol??

Yeah... Its overpriced

Compelling stuff.

[Mr Whippy]

Magog said:

p1stonhead said:

z4RRSchris said:

I invest a little bit, and would say the above isn't what I have heard from any other developers or investors. Sites are massively overvalued

that said still people out there, Mr Ashley just bought a site, exchanged and completed in a day for £200m!

Guy who told me that is real estate investment director for one of the big banks. They want to invest as much as possible because they see it rising steadily v soon. Hope he's right - will help our sales!

Frothy PR stuff from CBRE and their stooges at the Telegraph but they might be right.

http://www.telegraph.co.uk/finance/property/115617...

Confused, more boom and bust unless more homes are built.

But if more homes are built, then supply/demand = cheaper homes == effective bust for values?!

Unless more homes are built in just enough numbers to keep values high == cretinous policy.


Another 'guy' who is a real estate investment director for a big bank thinking values will rise steadily

Are these all the same professional investors that got it all wrong in 2007/2008 assuming house prices could literally rise forever to sustain their stupid investment policies?

As long as the public doesn't have to bail in these 'too big to fail' banks when it all crashes this time, I'm more than happy for them to speculate.

But if we have to bail them again... hmmm. I'll be there with a pitch fork this time I think!

Dave

[9mm]

I'm watching the (south coast) market closely at the moment with a view to a move in the Autumn.

Word I'm getting from estate agents is that selleers are sticking £100K and upwards on the ea's valuation. As a result, quite a lot of stuff is sticking for a long time. Plenty of stuff at £750K and above has been on the market for over a year.

[anonymous-user]

9mm said:

I'm watching the (south coast) market closely at the moment with a view to a move in the Autumn.

Word I'm getting from estate agents is that selleers are sticking £100K and upwards on the ea's valuation. As a result, quite a lot of stuff is sticking for a long time. Plenty of stuff at £750K and above has been on the market for over a year.

I'm on the South Coast near Poole and would concur with that.

I put my self-build house on the market in October and completed in January. I priced it above the EA valuations but only because I'd built a unique property with no other comparables (the only single-story contemporary house on the market). I've been keeping an eye on all the other stuff that went on at the same time, and many months before, and all are still on the market with toppy prices not offering good value.

There was a time when people would pay well over the odds around here but those times have long gone. Buyers are more canny and armed with a lot of information to make more informed decisions.

[okgo]

2008 was a fairly small blip on the graph of upward trajectory in London though?

[toohangry]

VX Foxy said:

toohangry said:

Unless rents track house prices. I don't know the answer to that - anyone?

They don't.

Care to expand? My experiences/research points to the opposite.

[walm]

toohangry said:

VX Foxy said:

toohangry said:

Unless rents track house prices. I don't know the answer to that - anyone?

They don't.

Care to expand? My experiences/research points to the opposite.

House prices change in real-time.
Rents are based on ASTs usually which tend to have 12 month terms.
So there is certainly a lag.

Also, as a landlord you have two ways to earn a return on your investment: rent and asset price appreciation.
If house prices rise rapidly, you tend to be less worried about the rental yield since you are still making out like a bandit.

Also don't forget that landlords have other investment opportunities too.
If a triple-A bond was offering 5% then you might be tempted to stick your savings in that since it is a lot less hassle.
However, as bond yields crater, property becomes more attractive (on a relative basis) so more people buy property - pushing the yield down as the prices rise.

If rent tracked house prices, this would be a flat line.


That's a dodgy London one.
Here is a longer term UK one:

[z4RRSchris]

p1stonhead said:

Guy who told me that is real estate investment director for one of the big banks. They want to invest as much as possible because they see it rising steadily v soon. Hope he's right - will help our sales!

banks don't mind pumping cash in as debt, they are all fighting to fund projects. but their position is so protected

commercial buildings are another beast, I can see why they would be getting into that

equity funding residential? I don't know any bank doing that bar maybe schroders