How far will house prices fall [volume 4]

[Burwood]

walm said:

loafer123 said:

The buyer of a 2 bed flat there should be two professionals aged, say 32, earning £60k pa each and considering getting a dog because they want a baby and don't have the time. They can pay £120x4 in mortgage plus £80k from savings, inheritance and the Bank of Mum & Dad which should just about do it after paying fees, stamp and a visit to DFS.

THAT IS EXACTLY RIGHT....!!!

(Except the dog - it's a cat... less maintenance, and it is still IKEA not DFS with perhaps a brief trip to John Lewis if mum & dad are helping with a house warming gift too...)

From what I've read, these London Battersea type developments are 80% purchased by foreign investors. Of course they got seen coming but in my opinion a lot of their money is dodgy so they probably know it. It's like laundering fee of 40%.

Good parts of canary wharf are well over £1000/ft. In fact the new apartments being built by Canary Wharf Plc themselves, on the actual estate are £1,500 and I'm not surprised.

[V6Alfisti]

Burwood said:

From what I've read, these London Battersea type developments are 80% purchased by foreign investors. Of course they got seen coming but in my opinion a lot of their money is dodgy so they probably know it. It's like laundering fee of 40%.

Good parts of canary wharf are well over £1000/ft. In fact the new apartments being built by Canary Wharf Plc themselves, on the actual estate are £1,500 and I'm not surprised.

Indeed and even before brexit (chinese capital outflow restrictions) a number of buyers were pulling out despite contracts to complete, forfeiting their deposit (often very low) and saying come sue them in China.....good luck with that !

[Burwood]

thelittleegg said:

I'm getting tempted to push the vendor of the place I'm buying (East London, near Stratford) to see what happens.

The mortgage valuation was carried out three days ago, but the buyer still has the property on the market. It was listed with multiple agents and the agent I've dealt with has removed it from their listings, but it still is on Rightmove and Zoopla with others.

We negotiated a price two weeks ago which was about 6% under asking, but the vendor is being a st by leaving it on the market despite my requests to remove it and the fact they agreed to remove it once the valuation was booked (i.e a week ago).

I just get the feeling that if they've not received any better offers in all this time and now being 1 week post brexit, I might be in a position to push them, especially give the fact they've decided to renege on removing it form the market. Yes, I realise this is gazundering, but they're holding out for a better deal, so there's no reason why I can't do the same.

If the valuation has been carried out you are well into the conveyancing process one would hope. You say renege so they agreed specifically to remove and have not? You can push all you want but be prepared to do what you have threatened. If the valuation comes in ok you have no grounds to reduce but it's your call. if someone did that to me i'd tell you to sling your hook.

[Pork]

We've been looking to move and been struggling to see properties before they go on Rightmove etc as we don't have a property were selling. We were told by the owner of the largest EA in he area, in a social setting, that not selling too makes us bottom of the list.

Going to view a place today, I'll be interested to see if that's changed.

Trouble is, it's too early for Brexit to have had an impact so difficult to know if we should be driving a hard bargain or just going with the pre-Brexit frenzy. With Carney intent on meddling, things could go higher still!

[jjlynn27]

Pork said:

We've been looking to move and been struggling to see properties before they go on Rightmove etc as we don't have a property were selling. We were told by the owner of the largest EA in he area, in a social setting, that not selling too makes us bottom of the list.

Going to view a place today, I'll be interested to see if that's changed.

Trouble is, it's too early for Brexit to have had an impact so difficult to know if we should be driving a hard bargain or just going with the pre-Brexit frenzy. With Carney intent on meddling, things could go higher still!

Out of pure curiosity, why would not having property to sell put you at the bottom of the list? Am I missing something here?

[Pork]

jjlynn27 said:

Out of pure curiosity, why would not having property to sell put you at the bottom of the list? Am I missing something here?

I asked exactly that. He said he couldn't get enough places to sell so why sell one to someone who isnt replenishing his stock. Plus, he gets two opportunities to earn his fees in one transaction.

I always thought chain free was a bonus. Seems it isn't. Or wasn't.

[Burwood]

Pork said:

jjlynn27 said:

Out of pure curiosity, why would not having property to sell put you at the bottom of the list? Am I missing something here?

I asked exactly that. He said he couldn't get enough places to sell so why sell one to someone who isnt replenishing his stock. Plus, he gets two opportunities to earn his fees in one transaction.

I always thought chain free was a bonus. Seems it isn't. Or wasn't.

The guys an asshole and this sort of BS is what gives them a bad name. What else, you must use his broker to get a mortgage so he makes a cut. Reminds me back in the late 90s when the market was mental and entire developments of 400 units would sell in 2 days. There was one 1 bed, 800ft smack on the river in wapping, a warehouse conversion. It was £220K (1998). The lounge has a huge 1 metre diameter paint stain on the carpet. The selling agents on site said its selling as is-no snagging and i say surely you're joking. They weren't.

[Burwood]

As a comparison, Auckland NZ is now average in excess of NZD 1m (£520k). Calls for the government to intentionally crash the market. 5 years ago the average was £285K.

[jjlynn27]

Pork said:

jjlynn27 said:

Out of pure curiosity, why would not having property to sell put you at the bottom of the list? Am I missing something here?

I asked exactly that. He said he couldn't get enough places to sell so why sell one to someone who isnt replenishing his stock. Plus, he gets two opportunities to earn his fees in one transaction.

I always thought chain free was a bonus. Seems it isn't. Or wasn't.

Seems odd reasoning, to me. When we bought our last place not having to sell the previous place was a definite bonus. But good luck .

[TheLordJohn]

thelittleegg said:

I've got an e-mail from the agent agreeing the price, stating the property will be removed from the market once AIP supplied and valuation booked. AIP supplied last week and valuation was completed on Wednesday. Therefore property should not be on the market any more. I've already chased once but the vendor is very clearly uncommitted to selling to me and hoping for a better offer or a mortgage free buyer, so therefore has decided not to honour our agreement and to carry on with viewings.

As you're an agent, you're in a very good position to comment, and a good reminder of how powerless the buyer is in these deals. I'm not going to lower my offer, but I also believe it's quite arrogant of the vendor to make an agreement with me and not stick to it, hence my reaction of "screw you, why should I keep my end of the deal". I guess the best I can do is ask the agent why the vendor has not upheld their side of the agreement.

You know what, this reminds me how st the whole house buying process is. My fifth purchase or attempted purchase in 10 years and in that time I've only met one good conveyancer who was proactive, and one honest estate agent (in Camden) who tells the truth (and Burwood is probably a nice guy as well , but I've not met him ).

Edited by thelittleegg on Saturday 2nd July 14:24

You'll know your own position and situation the best, but I wouldn't be impressed by their lack of integrity.
If it's the perfect house, and the deal makes sense, don't sabotage it.
With my track record of cutting off my nose to spite my face, i reckon i'd lower my offer 10% and tell him to have a look in the mirror...

[Burwood]

thelittleegg said:

Burwood said:

If the valuation has been carried out you are well into the conveyancing process one would hope. You say renege so they agreed specifically to remove and have not? You can push all you want but be prepared to do what you have threatened. If the valuation comes in ok you have no grounds to reduce but it's your call. if someone did that to me i'd tell you to sling your hook.

I've got an e-mail from the agent agreeing the price, stating the property will be removed from the market once AIP supplied and valuation booked. AIP supplied last week and valuation was completed on Wednesday. Therefore property should not be on the market any more. I've already chased once but the vendor is very clearly uncommitted to selling to me and hoping for a better offer or a mortgage free buyer, so therefore has decided not to honour our agreement and to carry on with viewings.

As you're an agent, you're in a very good position to comment, and a good reminder of how powerless the buyer is in these deals. I'm not going to lower my offer, but I also believe it's quite arrogant of the vendor to make an agreement with me and not stick to it, hence my reaction of "screw you, why should I keep my end of the deal". I guess the best I can do is ask the agent why the vendor has not upheld their side of the agreement.

You know what, this reminds me how st the whole house buying process is. My fifth purchase or attempted purchase in 10 years and in that time I've only met one good conveyancer who was proactive, and one honest estate agent (in Camden) who tells the truth (and Burwood is probably a nice guy as well , but I've not met him ).

Edited by thelittleegg on Saturday 2nd July 14:24

Me an agent...no I. Not. A good friend is the best conveyance solicitor out there. All property deals I do I lock the other side in. I pay or receive cash upfront for exclusivity.. 10k always ensures no screwing around. Anyone not interested in doing so is tyre kicking

[Jobbo]

Burwood said:

Me an agent...no I. Not. A good friend is the best conveyance solicitor out there. All property deals I do I lock the other side in. I pay or receive cash upfront for exclusivity.. 10k always ensures no screwing around. Anyone not interested in doing so is tyre kicking

I don't like the up-front deposit since it gives too much protection to a vendor - yet they're the ones who hide the past flooding or subsidence claim, or didn't bother to get building regs consent, or something else which comes out later which may become an issue.

Also, a holding deposit is not likely to be non-refundable anyway, so as a buyer I'd happily pay it safe in the knowledge the vendor thinks they have some protection, but don't really.

[Burwood]

Jobbo said:

Burwood said:

Me an agent...no I. Not. A good friend is the best conveyance solicitor out there. All property deals I do I lock the other side in. I pay or receive cash upfront for exclusivity.. 10k always ensures no screwing around. Anyone not interested in doing so is tyre kicking

I don't like the up-front deposit since it gives too much protection to a vendor - yet they're the ones who hide the past flooding or subsidence claim, or didn't bother to get building regs consent, or something else which comes out later which may become an issue.

Also, a holding deposit is not likely to be non-refundable anyway, so as a buyer I'd happily pay it safe in the knowledge the vendor thinks they have some protection, but don't really.

Naturally if there is something wrong in the conveyancing all bets are off.

[Pork]

Are there any anecdotes about the post-Brexit mood at EAs?

We went to see a place on Saturday, quite liked it but think it's toppy price wise. Asking is 50% more than it last sold for 3 years ago and, from what I can tell, there has been no meaningful development.

Asking the EA about where he sees the value (it's 'offers in region of'), he seemed stumped and I got the sense he thought it was a cheeky asking price too.....I guess that's why it's OIRO.

I'm keen to see what the mood is, get a feel for whether things are business as usual or not.

It's not an investment for us, it'll be our main home, but don't want to pay hugely over the odds if the bottom has fallen out of the market and we don't have to!

[battered]

The place next door is for sale again, just fallen through. I don't think this is anything to do with Brexit, just the way of things. I saw the EA showing some people round on Saturday. Times must be hard, to get an EA off their arse and actually trying t sell something is a rare event indeed.

I think there is a world of difference between the London market for trendy 50 sqm flats and the rest of the country where it's about getting a place to live in. I can't see it hanging around, it's a 3 bed bungalow with a double garage and a decent garden. Rather grannified, no updates since it was built in 1989 and has been let for a couple of years, but the fundamentals are all there. Price seems to be steady.

[V6Alfisti]

Pork said:

Are there any anecdotes about the post-Brexit mood at EAs?

We went to see a place on Saturday, quite liked it but think it's toppy price wise. Asking is 50% more than it last sold for 3 years ago and, from what I can tell, there has been no meaningful development.

Asking the EA about where he sees the value (it's 'offers in region of'), he seemed stumped and I got the sense he thought it was a cheeky asking price too.....I guess that's why it's OIRO.

I'm keen to see what the mood is, get a feel for whether things are business as usual or not.

It's not an investment for us, it'll be our main home, but don't want to pay hugely over the odds if the bottom has fallen out of the market and we don't have to!

I think this gives a hint as to the mood

http://www.standard.co.uk/news/london/london-house...

Even before this Haarts publically stated they thought the peak had been reached and to batten down the hatches, Foxtons reported that they were expecting significant slowing…there were lots more quotes from EA’s stating similar things in one of the papers.

There are just many reports of EA’s general pessimism, hence why shares for most of the estate agencies have fallen through the floor e.g Foxtons on 108p instead of 180p pre-brexit.

I suspect areas outside of London won’t feel the kick quick as quickly, but many are stating that it will ripple out…particularly to areas surrounding London that have seen growth as a result.

Already seeing many more properties come on/reduced in Taplow, there are tales of 100+ people pulling out of a development in Kent, 10-15% discounts being requested across London e.t.c

[Pork]

V6Alfisti said:

reply

Interesting article on London. Most opinions you can find are on London. I'm curious what is happening outside of London.

My guess is, areas that have seen large rises off the back of London will be the ones to be hit if the London scare stories convert to lower sellin prices,

[V6Alfisti]

Pork said:

Interesting article on London. Most opinions you can find are on London. I'm curious what is happening outside of London.

My guess is, areas that have seen large rises off the back of London will be the ones to be hit if the London scare stories convert to lower sellin prices,

I would certainly agree that any rises that have occured outside of London but are linked e.g. Ewell, Taplow, Bristol, Oxford e.t.c will see drops. However I would guess that those areas outside will feel it later than London.

Having said that areas such as Leeds/Kent e.t.c have apparently seen large amounts of people pull out too.

I can't imagine that it is just Londoner's that are holding off and expecting discounts, it will be wide spread but it has the largest impact on Londonder's due to the growth seen in the last few years there and simply the £ of drop based on even moderate levels of % decreases.

[mike74]

In the last week I've had emails from all the EA's I signed up with last year, all breezily asking me if I'm still looking to buy.

Pre-brexit all but one of them had stopped sending me new property updates, now they suddenly seem keen on keeping in touch with me.

[Pork]

mike74 said:

In the last week I've had emails from all the EA's I signed up with last year, all breezily asking me if I'm still looking to buy.

Pre-brexit all but one of them had stopped sending me new property updates, now they suddenly seem keen on keeping in touch with me.

I'm not sure if it is psychological but it does seem that the EAs are being a little more attentive than earlier in the year.

My senses tell me lots of people are holding off....just won't be able to evidence that until 3 or 6 months down the line.