How far will house prices fall [volume 5]
Discussion
menousername said:
If you sell still owing HTB repayments doesnt the Govt take the corresponding equity gain?
Kind of, the HTB repayment is 20% of the sale value, not what you borrowed originally. We did H2B on our first place, bought for £145k and sold for £165k, so we originally borrowed £29,000 and repaid £33,000.menousername said:
I think not so much pent up demand but sellers cant believe their house isnt worth / going to achieve what their neighbours got in 2016/2017.
I’ve now also given up on house moving because of what sellers are demanding up the chain.The offers I’m getting on mine are at bigger discounts to what many sellers are currently prepared to accept and at least one of those has been on the market for more than a year in an area where good stock goes in weeks or even less.
Coupled with employment uncertainty (consulting and finance firms now moving from hiring freeze to redundancies) I have decided to call it a day.
SteadyAsSheGoes said:
HTB stuff
One good story does not a success make! Is it a coincidence that every HTB home in SW London was priced at £599,995? No. It was because the house builders knew that they could price up to the limit because those who couldn't afford £400k flats without HTB could now afford £600k flats with HTB. There's no way those flats are/were worth £600k.This is a development I went to see when it was being built (I was renting in Putney at the time): https://www.rightmove.co.uk/house-prices/SW15-3BF....
Notice how every flat sold for £600k?
Now look at the one flat that's sold since then...£550k. So assuming they put in 10% as their equity for 60% of the property, that's £36k and they would have taken out £6k on sale - ouch!! And every other person who bought one of the original flats is now stuck in their pokey little 2-bed without taking a hit while the housebuilders got huge bonuses. Also bear in mind that it's our tax £s paying for this scheme and taking £20k of that loss too.Edited by AyBee on Thursday 2nd July 13:35
AyBee said:
SteadyAsSheGoes said:
HTB stuff
One good story does not a success make! Is it a coincidence that every HTB home in SW London was priced at £599,995? No. It was because the house builders knew that they could price up to the limit because those who couldn't afford £400k flats without HTB could now afford £600k flats with HTB. There's no way those flats are/were worth £600k.This is a development I went to see when it was being built (I was renting in Putney at the time): https://www.rightmove.co.uk/house-prices/SW15-3BF....
Notice how every flat sold for £600k?
Now look at the one flat that's sold since then...£550k. And every other person who bought one of the original flats is now stuck in their pokey little 2-bed without taking a hit while the housebuilders got huge bonuses. Also bear in mind that it's our tax £s paying for this scheme and taking that loss too...As I've said previously, the cost of shared ownership and a HTB mortgage is invariably cheaper than privately renting a similar property. It's like paying a premium for buying a new car, everything is new in the house and works so you don't really need to lift a finger, plus 10 year warranty. Seemed a good option to me.
JQ said:
Some slightly odd anecdotal evidence, and not totally house price related.
A post on our local FB page popped up this morning - it was a young lady looking for a job as it transpired she'd been made redundant. The post turned into a very open conversation between 3 ladies who live local to me but did not know each other. They'd each been made redundant this week and it came as a total shock to each of them. It appears they had assumed that as they'd not been furloughed their job security was rock solid. 2 had been at their firms for in excess of 15 years, one had just bought a new car (post lockdown) and another had just booked a summer holiday abroad.
As the conversation evolved it was clear it had not crossed any of their minds what might have been coming - the redundancies were a total shock. I suspect there's a lot of people out there with the same outlook who might be in for a shock shortly. The end of Furlough is going to be interesting.
I believe we're in a very strange bubble at the moment where the reality of the situation is totally lost on many.
Back on topic - Redrow have announced they intend to pay back all the furlough money they have received from the Gov.
Never a truer word said! some people are living in fantasy land its going to be brutalA post on our local FB page popped up this morning - it was a young lady looking for a job as it transpired she'd been made redundant. The post turned into a very open conversation between 3 ladies who live local to me but did not know each other. They'd each been made redundant this week and it came as a total shock to each of them. It appears they had assumed that as they'd not been furloughed their job security was rock solid. 2 had been at their firms for in excess of 15 years, one had just bought a new car (post lockdown) and another had just booked a summer holiday abroad.
As the conversation evolved it was clear it had not crossed any of their minds what might have been coming - the redundancies were a total shock. I suspect there's a lot of people out there with the same outlook who might be in for a shock shortly. The end of Furlough is going to be interesting.
I believe we're in a very strange bubble at the moment where the reality of the situation is totally lost on many.
Back on topic - Redrow have announced they intend to pay back all the furlough money they have received from the Gov.
Andy20vt said:
UpBeats said:
Andy20vt said:
. . . . and BOOM, exactly as I mentioned a few weeks ago. Great news the the UK Government are doing the right thing.
https://www.bbc.co.uk/news/uk-politics-53246899
I wonder though where all these people are going to live? Even high end London property will seem cheap for these guys where the average house price (mostly apartments) in Hong Kong hit $1.2 million last year.
Thats all we need. 300k chinese. BJ has lost the plot. Hopefully the HK govt will stop them leaving with assets.https://www.bbc.co.uk/news/uk-politics-53246899
I wonder though where all these people are going to live? Even high end London property will seem cheap for these guys where the average house price (mostly apartments) in Hong Kong hit $1.2 million last year.
SteadyAsSheGoes said:
I'm sure there will have been some over priced HTB properties but I wouldn't be surprised if most of those are in London. A lot of the HTB I've seen has been mostly family sized houses in new build areas on the edge of existing towns that are seen as quite desirable. Quite a lot of younger people in the town, perhaps those with a young family, like the idea of staying local but moving into a brand new house in a nice clean new part of town. Plus I've seen a lot of London commuters move in.
As I've said previously, the cost of shared ownership and a HTB mortgage is invariably cheaper than privately renting a similar property. It's like paying a premium for buying a new car, everything is new in the house and works so you don't really need to lift a finger, plus 10 year warranty. Seemed a good option to me.
Same position as we were in. Living down in a small mining town in Cornwall, the price of our new build 3 bed detached (£215k) was circa £20k above a similar 3 bed (although smaller) 70's/80's built semi detached. As I've said previously, the cost of shared ownership and a HTB mortgage is invariably cheaper than privately renting a similar property. It's like paying a premium for buying a new car, everything is new in the house and works so you don't really need to lift a finger, plus 10 year warranty. Seemed a good option to me.
Having said that, Redrow built out a site of about 40 houses down the road from us (in a less desirable area some would say) and they were selling similar properties (if not smaller) for upwards of £270k from memory. I think a lot of people have wandered into H2B without their eyes open and could well be in a sticky situation over the next 12-18 months.
menousername said:
I think not so much pent up demand but sellers cant believe their house isnt worth / going to achieve what their neighbours got in 2016/2017.
Those are my thoughts; we have accepted an offer of 8% less than the house was valued at in 2017, which seems fair enough, yet up the chain sellers expect buyers to underwrite their apparent losses for them. John Locke said:
Those are my thoughts; we have accepted an offer of 8% less than the house was valued at in 2017, which seems fair enough, yet up the chain sellers expect buyers to underwrite their apparent losses for them.
How do you know they have actually made any losses? Different area, but if I was to sell my place now, I'd expect to take a similar hit compared to 2017 values. The houses I would be looking at in a higher price bracket all have asking prices significantly higher than they would have done in 2017, but considering they appear to be selling through quickly I've no reason to think that isn't the correct valuation.
It doesn't mean that the higher value houses won't be hit as well in the future though.
AyBee said:
SteadyAsSheGoes said:
HTB stuff
One good story does not a success make! Is it a coincidence that every HTB home in SW London was priced at £599,995? No. It was because the house builders knew that they could price up to the limit because those who couldn't afford £400k flats without HTB could now afford £600k flats with HTB. There's no way those flats are/were worth £600k.This is a development I went to see when it was being built (I was renting in Putney at the time): https://www.rightmove.co.uk/house-prices/SW15-3BF....
Notice how every flat sold for £600k?
Now look at the one flat that's sold since then...£550k. So assuming they put in 10% as their equity for 60% of the property, that's £36k and they would have taken out £6k on sale - ouch!! And every other person who bought one of the original flats is now stuck in their pokey little 2-bed without taking a hit while the housebuilders got huge bonuses. Also bear in mind that it's our tax £s paying for this scheme and taking £20k of that loss too.Edited by AyBee on Thursday 2nd July 13:35
I'm a bit further out (Kingston) and I'd need to look for evidence, but I don't think that the five year old flats here are selling for anything like the value of the new builds, and why would they? I'd much rather have a brand new flat with 40% funded by the government for a while than buy an older one by myself.
The only light at the end of the tunnel is that the greedy developers increasingly seem to want more than the £600k limit for the new flats so they don't qualify for the bung!
Although I don't agree with HTB, I can see how it could be beneficial to buyers in a village/small town where an estate is built and there is little opportunity to just carry on building more and more in the area. Those homes could then build genuine extra value rather than have to compete with new, discounted equivalents all the time.
That just isn't compatible with the greed of London councils and developers.
Im not too sure about the edge-of-town new builds either.
Lots round here and appear to be a fair chunk more expensive that pre-owned - smaller footprint, tiny overlooked gardens, “double drive” which is a single drive, and they are big estates too. And they are expanding the site and building more and more.
I will follow it to see how it goes but in 5 years time it will probably not be ageing well and the typical busy estate with cars parked everywhere due to lack of drives.
I think its very dependent on the location and the build itself.
Will be interesting to see how well they sell. So far you have the usual one or two that have moved in while the building work is still ongoing
Lots round here and appear to be a fair chunk more expensive that pre-owned - smaller footprint, tiny overlooked gardens, “double drive” which is a single drive, and they are big estates too. And they are expanding the site and building more and more.
I will follow it to see how it goes but in 5 years time it will probably not be ageing well and the typical busy estate with cars parked everywhere due to lack of drives.
I think its very dependent on the location and the build itself.
Will be interesting to see how well they sell. So far you have the usual one or two that have moved in while the building work is still ongoing
menousername said:
Im not too sure about the edge-of-town new builds either.
Lots round here and appear to be a fair chunk more expensive that pre-owned - smaller footprint, tiny overlooked gardens, “double drive” which is a single drive, and they are big estates too. And they are expanding the site and building more and more.
The A38 between Taunton and Bridgewater has been pretty much fully developed like this. I have no idea where all those people are working.Lots round here and appear to be a fair chunk more expensive that pre-owned - smaller footprint, tiny overlooked gardens, “double drive” which is a single drive, and they are big estates too. And they are expanding the site and building more and more.
GlenMH said:
menousername said:
Im not too sure about the edge-of-town new builds either.
Lots round here and appear to be a fair chunk more expensive that pre-owned - smaller footprint, tiny overlooked gardens, “double drive” which is a single drive, and they are big estates too. And they are expanding the site and building more and more.
The A38 between Taunton and Bridgewater has been pretty much fully developed like this. I have no idea where all those people are working.Lots round here and appear to be a fair chunk more expensive that pre-owned - smaller footprint, tiny overlooked gardens, “double drive” which is a single drive, and they are big estates too. And they are expanding the site and building more and more.
menousername said:
troika said:
I think there will be a bit of a bloodbath in the autumn. However, friend of mine just put his place on for 1.3, sold in a week at full asking price. There are still plenty of folk with cash who’ll spend it on something they like.
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