How far will house prices fall? [Volume 3]

[spikeyhead]

Derek Chevalier said:

Deva Link said:

Derek Chevalier said:

Trommel said:

Derek Chevalier said:

Are you saying that not one person in the UK was able to get a mortgage last month?

It is the reason why the bottom end of the market has stalled - most people at that level can't find a 10-15% deposit overnight.

But the market has been like this for a couple of years?

We've been through this a million times now, but some PHer' just can't relate to the average person.

Even if they've got the deposit and the income multiple works, lenders are relectant to lend to borrowers where they think the affordability might be an issue, and that's particularly a problem for people at the bottom end as a lot of life's costs are pretty fixed - ie it costs the same to get the train to work however much you earn etc.

They are lending to people on a 3.5x single income multiple basis? Or are the multiples involved greater than this?

I nearly bought a few months ago, pulled out due to some dodgy home improvements, but it took a couple of months to sort out a mortgage, repeated to and fro from me to broker to mortgage provider. LTV 50%, a single multiple of joint incomes and it still took forever. Even though I'd got enough spare cash to buy the place outright it still took forever. Whilst it may be that most have a more regular income stream than I do we were asking for so little it should have been easy but wasn't, so we are renting for another year, providing someone stuck with a slowly decaying £200k house with about 4% yield.

[porridge]

spikeyhead said:

I nearly bought a few months ago, pulled out due to some dodgy home improvements, but it took a couple of months to sort out a mortgage, repeated to and fro from me to broker to mortgage provider. LTV 50%, a single multiple of joint incomes and it still took forever. Even though I'd got enough spare cash to buy the place outright it still took forever. Whilst it may be that most have a more regular income stream than I do we were asking for so little it should have been easy but wasn't, so we are renting for another year, providing someone stuck with a slowly decaying £200k house with about 4% yield.

Curious, did the place you were looking to buy sell? And at same as your offer etc

Or are you renting the house in question

Edited by porridge on Saturday 6th October 18:59

[DukeDickson]

Derek Chevalier said:

Deva Link said:

Derek Chevalier said:

Trommel said:

Derek Chevalier said:

Are you saying that not one person in the UK was able to get a mortgage last month?

It is the reason why the bottom end of the market has stalled - most people at that level can't find a 10-15% deposit overnight.

But the market has been like this for a couple of years?

We've been through this a million times now, but some PHer' just can't relate to the average person.

Even if they've got the deposit and the income multiple works, lenders are relectant to lend to borrowers where they think the affordability might be an issue, and that's particularly a problem for people at the bottom end as a lot of life's costs are pretty fixed - ie it costs the same to get the train to work however much you earn etc.

They are lending to people on a 3.5x single income multiple basis? Or are the multiples involved greater than this?

The multiples have to be hefty for any singleton, unless the salary is good (or pitiful in this place, it would seem), the deposit is sizeable (likewise), or the debt doesn't exist (and again).
Of course you're average person/couple on average income (or more likely 1.5 average as a couple in the real world) with the usual financial circumstances (rights or wrongs of that ignored for the moment), saving anywhere between 15k and 30k+ is a bit of a challenge. The general rule of thumb is that they'd be doing well to save more than a couple of bags a year each, which leaves them slightly short of the required figure any time soon.
Of course this may not apply to pockets of the UK, but in large slabs it is the reality. Then of course there is the spectre of Seller 2007 still being the default choice.

[Derek Chevalier]

DukeDickson said:

Derek Chevalier said:

Deva Link said:

Derek Chevalier said:

Trommel said:

Derek Chevalier said:

Are you saying that not one person in the UK was able to get a mortgage last month?

It is the reason why the bottom end of the market has stalled - most people at that level can't find a 10-15% deposit overnight.

But the market has been like this for a couple of years?

We've been through this a million times now, but some PHer' just can't relate to the average person.

Even if they've got the deposit and the income multiple works, lenders are relectant to lend to borrowers where they think the affordability might be an issue, and that's particularly a problem for people at the bottom end as a lot of life's costs are pretty fixed - ie it costs the same to get the train to work however much you earn etc.

They are lending to people on a 3.5x single income multiple basis? Or are the multiples involved greater than this?

The multiples have to be hefty for any singleton, unless the salary is good (or pitiful in this place, it would seem), the deposit is sizeable (likewise), or the debt doesn't exist (and again).
Of course you're average person/couple on average income (or more likely 1.5 average as a couple in the real world) with the usual financial circumstances (rights or wrongs of that ignored for the moment), saving anywhere between 15k and 30k+ is a bit of a challenge. The general rule of thumb is that they'd be doing well to save more than a couple of bags a year each, which leaves them slightly short of the required figure any time soon.
Of course this may not apply to pockets of the UK, but in large slabs it is the reality. Then of course there is the spectre of Seller 2007 still being the default choice.

The Gounment could always stop trying to "help" FTBs by propping up the housing market with various schemes and let it correct, thereby reducing deposit/multiple requirements by raising rates, but I'm not sure the banks/Joe Public could take it. I certainly don't think encouraging banks to lend more/take more risk is the way forward if Pustule is correct

http://www.bbc.co.uk/news/business-19842201

I think it is more likely we continue like this for a decade or two while the market corrects in the least painful way possible.

[groak]

Trommel said:

It is the reason why the bottom end of the market has stalled - most people at that level can't find a 10-15% deposit overnight.

Hmmm, maybe yes and maybe no, but even in the provincial deserts it doesn't take TOO long for a young working couple to scrape five grand together...

http://www.rightmove.co.uk/property-for-sale/prope...

(and a thousand others of one type or another)


...or even TWO grand??

http://www.rightmove.co.uk/property-for-sale/prope...

[spikeyhead]

porridge said:

spikeyhead said:

I nearly bought a few months ago, pulled out due to some dodgy home improvements, but it took a couple of months to sort out a mortgage, repeated to and fro from me to broker to mortgage provider. LTV 50%, a single multiple of joint incomes and it still took forever. Even though I'd got enough spare cash to buy the place outright it still took forever. Whilst it may be that most have a more regular income stream than I do we were asking for so little it should have been easy but wasn't, so we are renting for another year, providing someone stuck with a slowly decaying £200k house with about 4% yield.

Curious, did the place you were looking to buy sell? And at same as your offer etc

Or are you renting the house in question

Edited by porridge on Saturday 6th October 18:59

I've no idea what happened to the place we didn't buy but it's no longer on Rightmove. It's too early for it to appear on the sales lists too. We're renting somewhere different.

groak said:

Hmmm, maybe yes and maybe no, but even in the provincial deserts it doesn't take TOO long for a young working couple to scrape five grand together...

http://www.rightmove.co.uk/property-for-sale/prope...

(and a thousand others of one type or another)


...or even TWO grand??

http://www.rightmove.co.uk/property-for-sale/prope...

That second one looks to have a lot of space for the money. Why so cheap?

[groak]

spikeyhead said:

That second one looks to have a lot of space for the money. Why so cheap?

Cheap?? CHEAP??? That's a DEAR one, London boy...

http://www.rightmove.co.uk/property-for-sale/prope...

http://www.rightmove.co.uk/property-for-sale/prope...

...and those are in the agents windows // cover prices. Just think what you can get off-market!!

By the way, Ian Duncan Smith's up to something that just MIGHT bring the entire property market crashing down.

Imagine if the medium-low to bottom end of the market just STOPPED. Nothing selling OR renting. a million 'zero value' properties. And if Housing Association and LA properties become financially unfeasible to continue operating......how will the shock wave affect the rest of the market? Hmmm

IDS might just be on the doorstep of creating a black anarchy the UKs enemies could only ever dream about. It's about a year away from starting.

[Deva Link]

groak said:

Cheap?? CHEAP??? That's a DEAR one, London boy...

http://www.rightmove.co.uk/property-for-sale/prope...

Is that Police crime scene tape across one corner of the room?

I know a way to kill this market - let me buy a few of them.

[Justayellowbadge]

The benefit reforms, presumably?

[dxg]

groak said:

spikeyhead said:

That second one looks to have a lot of space for the money. Why so cheap?

Cheap?? CHEAP??? That's a DEAR one, London boy...

http://www.rightmove.co.uk/property-for-sale/prope...

http://www.rightmove.co.uk/property-for-sale/prope...

...and those are in the agents windows // cover prices. Just think what you can get off-market!!

By the way, Ian Duncan Smith's up to something that just MIGHT bring the entire property market crashing down.

Imagine if the medium-low to bottom end of the market just STOPPED. Nothing selling OR renting. a million 'zero value' properties. And if Housing Association and LA properties become financially unfeasible to continue operating......how will the shock wave affect the rest of the market? Hmmm

IDS might just be on the doorstep of creating a black anarchy the UKs enemies could only ever dream about. It's about a year away from starting.

What's the 'something'?

[princeperch]

groak said:

spikeyhead said:

That second one looks to have a lot of space for the money. Why so cheap?

Cheap?? CHEAP??? That's a DEAR one, London boy...

http://www.rightmove.co.uk/property-for-sale/prope...

http://www.rightmove.co.uk/property-for-sale/prope...

...and those are in the agents windows // cover prices. Just think what you can get off-market!!

By the way, Ian Duncan Smith's up to something that just MIGHT bring the entire property market crashing down.

Imagine if the medium-low to bottom end of the market just STOPPED. Nothing selling OR renting. a million 'zero value' properties. And if Housing Association and LA properties become financially unfeasible to continue operating......how will the shock wave affect the rest of the market? Hmmm

IDS might just be on the doorstep of creating a black anarchy the UKs enemies could only ever dream about. It's about a year away from starting.

do you reckon the agent would accept an offer before they go to auction? doesnt look like they would need a great deal of work to get them up to scratch - and they would rent for what - 300 a month?

eta Ive just had a look through the blerb and at a guess theres about 5 or 6ks worth of work to be done to that flat - still its very cheap...

Edited by princeperch on Sunday 7th October 21:01

[groak]

dxg said:

What's the 'something'?

The very best people to ask are the ones involved in HA and LA rent administration. There's at least one on PH.

I've been speaking to a pretty senior figure and adviser on housing policy who was himself a director of housing at a large LA for several decades before moving to private consultancy. He doesn't think there's ever been as serious a threat to the social housing industry in HIS lifetime. Mind you, he also reckons that after a period of havoc and disruption the usual faces will adapt as they always do and it'll be back to more or less 'business as usual'. You might be surprised to hear that an enormous influence on Mr Duncan Smith's 'welfare reform' notions was 2 weeks he spent living on benefits in Castlemilk. Apparently this was a revelatory experience of damascean proportions and is the soft sand underpinning many of his barmy wheezes.

Sadly today we hear of the bonkers plan to stop HB for under 25's. One sector who may well suffer are returning troops who're opting to return to civvy street. A lot of them are under 25. And a lot of them find a bit of initial difficulty re-adapting to non-army life. Shame they'll have to go from fighting in the middle east to living in a bag on the streets. Maybe like their yank equivalents coming back from 'nam they'll take to forming/joining motorcycle tribes. They're traditionally nomadic and hierarchical and often organise themselves in a parody of army structure. At least denying them a house on benefits will allow the tories to divert tuppence ha'penny to some other stoopid wasteful stunt.

[groak]

princeperch said:

do you reckon the agent would accept an offer before they go to auction? doesnt look like they would need a great deal of work to get them up to scratch - and they would rent for what - 300 a month?

Don't see why not. And you might get closer to £400pcm with the right tenant. Theoretically at least. Of course, under IDS' welfare 'reforms' Joe Taxpayer's HB money will be getting sent/gifted direct to the junkie, erm, I mean the tenant. Normally he'd just take it and spend it and tell you (and your agent) to feck off and if you don't like it you can spend 6 months at least with his legal aid lawyer delaying his eviction. He's a tramp. He's had fifty flats. He's come to enjoy the variety.

OR. You could give him to understand that if he rips you off for so much as a penny he'll get slashed and so will his manky tramp burd. If he knows it's for real, he'll definitely pay you.

Alternatively, you might prefer just to let this particular 'business opportunity' pass you by and leave it to whoever's 'running the show' in Port Glasgow.

[princeperch]

groak said:

Alternatively, you might prefer just to let this particular 'business opportunity' pass you by and leave it to whoever's 'running the show' in Port Glasgow.

• gulp*

[porridge]

Groak, are your last few posts about suffering squaddies or about potential reductions to your bottom line?

[Hitch78]

Yes, but they deserve those things.

[FourWheelDrift]

groak said:

Cheap?? CHEAP??? That's a DEAR one, London boy...

http://www.rightmove.co.uk/property-for-sale/prope...

Is that crime scene police tape?

[turbobloke]

FourWheelDrift said:

Is that crime scene police tape?

Certainly in keeping with the size and shape of the new-ish looking floorboards where Crime Scene Glasgae found the body.

[chris watton]

FourWheelDrift said:

Is that crime scene police tape?

They usually put tape everywhere if the property is a repo.

Edited by chris watton on Monday 8th October 12:03

[Pork]

Derek Chevalier said:

The Gounment could always stop trying to "help" FTBs by propping up the housing market with various schemes and let it correct, thereby reducing deposit/multiple requirements by raising rates, but I'm not sure the banks/Joe Public could take it. I certainly don't think encouraging banks to lend more/take more risk is the way forward if Pustule is correct

http://www.bbc.co.uk/news/business-19842201

I think it is more likely we continue like this for a decade or two while the market corrects in the least painful way possible.

They're not trying to help FTBs at all, they're trying to help developers and big business. They couldn't give two hoots if the average house is £1m, so long as big business is happy. Infact, they'd probably ratehr like it, it'd mean average people would have to keep working so they'd be able to keep taxing.