House Prices - Are Estate Agents To Blame
Discussion
Blanchimont said:
They can put it up for whatever they want. But with rightmove you can see what others sold for nearby. I suspect, unless absolutely immaculate and tech ridden inside, with everything brand new and top end, he will never sell it.
Chancing his arm? Taking the piss is more accurate.
Definitely, and certain houses will sell for what the market will stand for in a given area. Within reason a 3 bed semi in a given area will only ever be worth what a given 3 bed semi is worth in that area +/- a few %. Same as cars, don't expect to get the price of modifications back!Chancing his arm? Taking the piss is more accurate.
Case in point. Just sold our house for the highest ever on our old road. Of a type it was very much at the top of the market in the area we were in. We kept it nice, did a great job on the garden, looked after it etc but did not do anything hugely significant to it in the 12 years we were there as it suited our needs as was and we didn't think we'd get the money back in any way as it was already at the top end.
Our neighbour also has his place on the market. Broadly the same as ours (4 bed detached, double garage etc) but he's done loads to it (big conservatory / extension, remodelled the downstairs completely plus various other bits and bobs). He has it up for sale for £45k more than ours was. His went on the market a couple of weeks before ours and is still on the market. People who bought ours didn't even bother looking at his as they said it was too much for what it was.
surveyor said:
It's complicated. But....
In the old days demand was limited by 3.5 times your salary.
The banks have helped fuel the booms over the years by relaxing their lending policiys and enabling more buyers hence demand.
The banks profit margin on lending means they are increasing profit by increasing the size of their lending book.
Individuals have to borrow more to buy the next house - there is no winner unless they are an investor or looking to downsize.
I blame banks.
If you go back to the 1960's when my parents bought their first house the bank would only take my fathers salary into consideration when calculating the maximum lending figure.In the old days demand was limited by 3.5 times your salary.
The banks have helped fuel the booms over the years by relaxing their lending policiys and enabling more buyers hence demand.
The banks profit margin on lending means they are increasing profit by increasing the size of their lending book.
Individuals have to borrow more to buy the next house - there is no winner unless they are an investor or looking to downsize.
I blame banks.
When the joint salary was taken into consideration the amount that a couple could borrow substantially increased; this increased the amount of available credit floating around and thus increased house prices.
surveyor said:
It's complicated. But....
In the old days demand was limited by 3.5 times your salary.
The banks have helped fuel the booms over the years by relaxing their lending policiys and enabling more buyers hence demand.
The banks profit margin on lending means they are increasing profit by increasing the size of their lending book.
Individuals have to borrow more to buy the next house - there is no winner unless they are an investor or looking to downsize.
I blame banks.
Banks are banks. Just like the 'scorpion & the frog' saga, we all know how banks will behave. That is why all banks are regulated. That is why their lending was restricted by regulation. In the old days demand was limited by 3.5 times your salary.
The banks have helped fuel the booms over the years by relaxing their lending policiys and enabling more buyers hence demand.
The banks profit margin on lending means they are increasing profit by increasing the size of their lending book.
Individuals have to borrow more to buy the next house - there is no winner unless they are an investor or looking to downsize.
I blame banks.
At the same time we also know that a significant % of consumers will consume to excess if facilitated. It's a pretty set % of any human population that has this natural propensity. So, they are also regulated. Regulation has always been in place to curb the excesses of unfettered consumption. Shakespeare even wrote a play around such regulation. None of this is new in the slightest.
The regulation had been put in place to temper the natural behaviour of both banks and consumers.
Those who are to blame are those who lifted this regulation to unleash the natural forces of debt and spend. And I'm afraid it began with a milk snatcher and massively accelerated under the king of 'light touch regulation' and the pioneer of 'no more boom and bust'.
The excessive boom in property values is the result of a political desire to create a false wealth through excessive debt which they have facilitated by deliberately removing the very regulation that was put in place by those who trod before them to halt the natural tendencies of banks to seek profit and consumers to over consume.
We're building fewer and fewer houses each decade that passes. In addition, houses are being built in increasingly larger estates i.e. by the nationals.
Either the 'market' has forced developers/the industry down this route, or developers have forced the 'market'. I'm quite cynical, so suspect the latter.
That being said, no one really likes Estate Agents, so, they can share the blame too.
Either the 'market' has forced developers/the industry down this route, or developers have forced the 'market'. I'm quite cynical, so suspect the latter.
That being said, no one really likes Estate Agents, so, they can share the blame too.
The estate agent's job is to get the highest price they can!! Back in 2007 I had a house that I though was worth £275k, maybe £280k if I was really lucky. The local agent said he had two people looking for exactly my house, so why not price it high? He put it on the market at £315k, and we had an offer of £309k within a week.
He didn't set the price, the buyer did when they made an offer. No one forces you to pay the asking price, it's not the estate agent's fault.
He didn't set the price, the buyer did when they made an offer. No one forces you to pay the asking price, it's not the estate agent's fault.
clarkey said:
The estate agent's job is to get the highest price they can!! Back in 2007 I had a house that I though was worth £275k, maybe £280k if I was really lucky. The local agent said he had two people looking for exactly my house, so why not price it high? He put it on the market at £315k, and we had an offer of £309k within a week.
He didn't set the price, the buyer did when they made an offer. No one forces you to pay the asking price, it's not the estate agent's fault.
Equally, when I was an Estate Agent it wan't uncommon to get offers significantly below the asking price - your house was up for £315 and got £309, we just as easily might have seen an offer of £270 for it from a different person.He didn't set the price, the buyer did when they made an offer. No one forces you to pay the asking price, it's not the estate agent's fault.
WindyMills said:
We're building fewer and fewer houses each decade that passes. In addition, houses are being built in increasingly larger estates i.e. by the nationals.
Either the 'market' has forced developers/the industry down this route, or developers have forced the 'market'. I'm quite cynical, so suspect the latter.
Yeah, it's all the fault of the developers. Is it bEither the 'market' has forced developers/the industry down this route, or developers have forced the 'market'. I'm quite cynical, so suspect the latter.
ks. Who's forcing you to buy on a large estate? You are free to shell out for the individual home of character, built in local stone, in a large plot, set well back from the road and away from its neighbours. Oh f* me, when you find that house the price is higher and there's a queue of buyers. Well who knew?So make your choice. Come to Leeds, £250k gets you a 4 bed detached on a modern estate that looks like a shoebox, or a 2 bed stone cottage with roses up the door. You choose. Can't get enough space in a little cottage? Oh dear. Perhaps we can persuade the developers to build half as many houses, all twice the normal size, from expensive materials, and sell them for the same money they normally get for rabbit hutches. Or possibly not.
surveyor said:
It's complicated. But....
In the old days demand was limited by 3.5 times your salary.
The banks have helped fuel the booms over the years by relaxing their lending policiys and enabling more buyers hence demand.
The banks profit margin on lending means they are increasing profit by increasing the size of their lending book.
Individuals have to borrow more to buy the next house - there is no winner unless they are an investor or looking to downsize.
I blame banks.
Precisely this! Lend everyone twice as much money and they don't all end up in twice as nice a house - they end up in the same house but with double the mortgage.In the old days demand was limited by 3.5 times your salary.
The banks have helped fuel the booms over the years by relaxing their lending policiys and enabling more buyers hence demand.
The banks profit margin on lending means they are increasing profit by increasing the size of their lending book.
Individuals have to borrow more to buy the next house - there is no winner unless they are an investor or looking to downsize.
I blame banks.
Lie to buy, interest only, buy to let, all schemes to stick vastly more debt on the consumer - who laps it up because rising house prices are a 'good thing'. Apparently.
elvismiggell said:
And what someone is prepared to sell it more - when we talk about value, we often forget that vendors can and will refuse to sell it for what some people are prepared to pay for it!
But then there is no sale and therefore no value set. The 'what's it worth' values are set by actual transactions, not by people who think there two up two down is worth a million pounds when in reality they're selling for half that. rotarymazda said:
As you say, house prices are basically down to credit availability. This includes credit for both owner occupiers and buy-to-let landlords. The odd thing is that the lending criteria for BTL uses rent-based calculations that result in higher loan limits than an owner occupier loan that uses income based calculations.
This, in a nutshell, is why I own one BTL property and am in the process of purchasing a second and yet rent my own home. I cannot afford to buy the type of home I want to live in, but I can afford to rent it.It's certainly true that if you have (say) £300k and that's all, either as a loan or cash, and you want to live in a £300k house, you're better to buy 3 x £100k places and let them (£450-500 a month each here in Leeds) and use the proceeds to rent the £300k house (£1250 a month?) than buy the £300k house. Obviously assumes you can let all 3, you can cope with the aggro, etc, but it underlines how the rental market is skewed to cheaper properties.
rotarymazda said:
GrizzlyBear said:
House prices are dependant on the supply and demand of credit (if you can't borrow it, you can't buy), hence with the current easy credit, the lowest base rate ever, schemes like funding for lending to allow rates to be even lower and thus ruining savings rates (so people reallocate their money), printing money (shapes the yield curve). So the cause of the current extremely high house prices are the Government/Bank of England, the reason for this is anyone's guess.
As you say, house prices are basically down to credit availability. This includes credit for both owner occupiers and buy-to-let landlords. The odd thing is that the lending criteria for BTL uses rent-based calculations that result in higher loan limits than an owner occupier loan that uses income based calculations.The reason the Government likes high house prices is that it helps get them voted back in.
Oh well, if young people can't be bothered to think tactically, and scratch a cross on a bit of paper to get rid of people that are acting against their interests. what can you do? but they spend ages ranting how unfair it is they are priced out... Yes, it is unfair so do something about it.
Edited by GrizzlyBear on Sunday 19th June 14:43
The housing boom has really benefited those who were able to get a decent home before values shot up. If the last time prices in the southeast bore a sensible relationship to people's earnings was in 2000, then the cutoff is probably somewhere around 45.
Anecdotally, I know of quite a few people in the mid-thirties to early forties group who've moved out of London because the cost of getting a decent family home is beyond their means.
Cameron is 49, Osborne is 45, and Johnson is 52. The Milibands are of a similar age, Corbyn is older, but his deputy, Watson, is also 49. So all are of an age where they've done well from the housing boom.
However, Cameron was 39 when he became leader of the Tories. If Corbyn hangs on until after the next general election, and Labour choose someone of a similar age, then whoever takes over could be in their mid-thirties now. That's into Generation Rent in London, which would put home ownership up the agenda without GrizzlyBear's suggestion of tactical voting.
As for who to blame for prices, I think that the average property owner has to shoulder some of the blame. Houses have gone from being somewhere to live, to being speculative investments.
Anecdotally, I know of quite a few people in the mid-thirties to early forties group who've moved out of London because the cost of getting a decent family home is beyond their means.
Cameron is 49, Osborne is 45, and Johnson is 52. The Milibands are of a similar age, Corbyn is older, but his deputy, Watson, is also 49. So all are of an age where they've done well from the housing boom.
However, Cameron was 39 when he became leader of the Tories. If Corbyn hangs on until after the next general election, and Labour choose someone of a similar age, then whoever takes over could be in their mid-thirties now. That's into Generation Rent in London, which would put home ownership up the agenda without GrizzlyBear's suggestion of tactical voting.
As for who to blame for prices, I think that the average property owner has to shoulder some of the blame. Houses have gone from being somewhere to live, to being speculative investments.
Your analysis fails to note that Cameron and Johnson, and probably also Osborne, have enough money that house prices anywhere aren't a concern to them personally.
It's about low interest rates and low taxatiuon. If houses were taxed (I mean properly, not the poxy amounts at present) then it would kill the rising market stone dead. Look at what's happened to the millionaire pads in London since the stamp duty changes. However no sane polito will ever do this, as it will bite the hand that feeds and nobody gives a toss about finance or knows a thing about finance except that if their house isn't rising in value it's a Bad Thing and if that's as a result of taxation it's a Really Bad Thing and The Gov'ment's Fault. Cue that government out on its arse, next time out, in a big way.
It's about low interest rates and low taxatiuon. If houses were taxed (I mean properly, not the poxy amounts at present) then it would kill the rising market stone dead. Look at what's happened to the millionaire pads in London since the stamp duty changes. However no sane polito will ever do this, as it will bite the hand that feeds and nobody gives a toss about finance or knows a thing about finance except that if their house isn't rising in value it's a Bad Thing and if that's as a result of taxation it's a Really Bad Thing and The Gov'ment's Fault. Cue that government out on its arse, next time out, in a big way.
The value is the price a willing buyer gives to a willing seller. If the agent finds a buyer at that price then that is the value.
It actually all depends on the supply of similar housed in similar local areas. Short supply equals higher prices. The mortgage Valuer will look at the comparable sales and is unlikely to over value unless the house is a one off
It actually all depends on the supply of similar housed in similar local areas. Short supply equals higher prices. The mortgage Valuer will look at the comparable sales and is unlikely to over value unless the house is a one off
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