How far will house prices fall [volume 4]
Discussion
Not particularly interesting anecdote on forced selling alert.
While I'm not really Front of House these days I do have the pleasure of house visits on behalf of estate agents (shoot me). Today I visited a Barratt-esque cul de sac in the Surrey/South London borders. Back in a former life I was a more frequent visitor and over a period of about six months was called out to two separate potential sellers. I walked away from both of them as I didn't consider them serious sellers.
That was about 10 years ago.
Today both those houses remain owned by their original vendors (distinctive cars) and both have For Sale boards on the drive. Both are on for about a hundred thousand (10%) more than the gaff I visited (that has also been on the market since late Spring).
Even the chaps I visited today vehemently claim to be desperate to move. In fairness they should sell.
All three are around retirement age.
Amazing anecdote ends.
While I'm not really Front of House these days I do have the pleasure of house visits on behalf of estate agents (shoot me). Today I visited a Barratt-esque cul de sac in the Surrey/South London borders. Back in a former life I was a more frequent visitor and over a period of about six months was called out to two separate potential sellers. I walked away from both of them as I didn't consider them serious sellers.
That was about 10 years ago.
Today both those houses remain owned by their original vendors (distinctive cars) and both have For Sale boards on the drive. Both are on for about a hundred thousand (10%) more than the gaff I visited (that has also been on the market since late Spring).
Even the chaps I visited today vehemently claim to be desperate to move. In fairness they should sell.
All three are around retirement age.
Amazing anecdote ends.
WCZ said:
DRFC1879 said:
I don't think there's such a thing as a £900k flat up north. I live in a four-bed detached house in a nice area and it's valued at c. £230k. You could buy a whole apartment block for £900k.
I live in Manchester city center, there's several £1m+ flats here and more to be coming soon (the new penthouses @ owen street/trinity are rumored to be going on the market for £5-8m and Ian Simpsons Beetham penthouse @ around £10m)matrignano said:
First home!
I know in the long term it won't make a massive difference, but I'd be royally pissed off if I bought now and prices declined another 5-10% before picking up again!
Dropping 900k on a first home?I know in the long term it won't make a massive difference, but I'd be royally pissed off if I bought now and prices declined another 5-10% before picking up again!
Does it have character features? Nowhere else in London? Can you wait 1-2years for the true bottom in the market?
ClaphamGT3 said:
I don't think that article is particularly strong on either facts or how to interpret them
There are many sources that support the view :Acadata (Uses Land Registry plus some oddities to calc)
Land Registry (Sold prices)
Rightmove (Asking price)
RICS - Reports directly from estate agent
Nationwide
LonRes - Shows another clear shift from buying to letting
I think it is only Halifax that has shown an increase (in the last month - although I think that was nationwide rather than any breakdown for London), and hence the 'flip flopping' you have witnessed from papers, some choose not to flip flop and typically only report on any gains or report the YoY growth - forgetting to reflect that the YoY 'growth' is dropping and its typically negative MoM.
The facts/numbers are quite clear though, in London this is not just stagnating it is falling.
p1stonhead said:
I know loads of couples (I say loads, probably 4 or 5) on closer to £100k than £50k each. Gives a lot of buying power when combined x 5. good post from Tonker above. Sensible.
stuckmojo said:
p1stonhead said:
I know loads of couples (I say loads, probably 4 or 5) on closer to £100k than £50k each. Gives a lot of buying power when combined x 5. good post from Tonker above. Sensible.
With a a good rainy day fund I wouldn’t count that as too scary on the face of it personally but that’s just me.
On a variable rate obviously a lot riskier. LTV would ease the worries too depending on what the house cost.
Edited by p1stonhead on Thursday 21st September 20:02
p1stonhead said:
Depends really. A half million pound mortgage for a couple on £100k combined day £50k each (around £7k a month takehome) is only £1700 at the moment....
With a a good rainy day fund I wouldn’t count that as too scary on the face of it personally but that’s just me.
On a variable rate obviously a lot riskier. LTV would ease the worries too depending on what the house cost.
I still think this is a risky way of planning the biggest purchase/commitment in a persons life, people lose sight of the real risk and numbers. Especially where even modest 1% monthly falls wipes off £6.1k a month (then onto a decreasing basis). If that runs to two full years thats £120k knocked off, which means....the value of the house is £10k under the deposit and thus they have next to no equity and then interest rates have increased for an extra wammy. So they then may need to stay on a SVR which even at today's super low rates are 4.24-4.74% which takes you to £2.9k/monthWith a a good rainy day fund I wouldn’t count that as too scary on the face of it personally but that’s just me.
On a variable rate obviously a lot riskier. LTV would ease the worries too depending on what the house cost.
Edited by p1stonhead on Thursday 21st September 20:02
The half million pound mortgage needs to be supported by a deposit of say £110k (and the stamp duty) on a £610k house which is just over 80% LTV.
This according to Moneysupermarket is £2000 per month which is fixed for just 2 years on a 25 year mortgage, I am not sure where you get £1700 on £500k, that is equivalent to 0.16% interest over 25 years, let alone the 5x Salary which must cut the availability reasonably significantly. It only takes one in the couple to lose their job and they can't then afford all the other bills that doesnt relate to a mortgage i.e kids, car, car costs, utilities, furnishings, food, living e.t.c
Edited by V6Alfisti on Thursday 21st September 22:03
V6Alfisti said:
p1stonhead said:
Depends really. A half million pound mortgage for a couple on £100k combined day £50k each (around £7k a month takehome) is only £1700 at the moment....
With a a good rainy day fund I wouldn’t count that as too scary on the face of it personally but that’s just me.
On a variable rate obviously a lot riskier. LTV would ease the worries too depending on what the house cost.
I still think this is a risky way of planning the biggest purchase/commitment in a persons life, people lose sight of the real risk and numbers. Especially where even modest 1% monthly falls wipes off £6.1k a month (then onto a decreasing basis). If that runs to two full years thats £120k knocked off, which means....the value of the house is £10k under the deposit and thus they have next to no equity and then interest rates have increased for an extra wammy. So they then may need to stay on a SVR which even at today's super low rates are 4.24-4.74% which takes you to £2.9k/monthWith a a good rainy day fund I wouldn’t count that as too scary on the face of it personally but that’s just me.
On a variable rate obviously a lot riskier. LTV would ease the worries too depending on what the house cost.
Edited by p1stonhead on Thursday 21st September 20:02
The half million pound mortgage needs to be supported by a deposit of say £110k on a £610k house which is just over 80% LTV.
This according to Moneysupermarket is £2000 per month which is fixed for just 2 years on a 25 year mortgage, I am not sure where you get £1700 on £500k, that is equivalent to 0.16% interest over 25 years.
I know as me and the missus debated buying a place which would have been nearly identical to the above not too long ago. Didn’t in the end but it’s available.
V6Alfisti said:
p1stonhead said:
Depends really. A half million pound mortgage for a couple on £100k combined day £50k each (around £7k a month takehome) is only £1700 at the moment....
With a a good rainy day fund I wouldn’t count that as too scary on the face of it personally but that’s just me.
On a variable rate obviously a lot riskier. LTV would ease the worries too depending on what the house cost.
I still think this is a risky way of planning the biggest purchase/commitment in a persons life, people lose sight of the real risk and numbers. Especially where even modest 1% monthly falls wipes off £6.1k a month (then onto a decreasing basis). If that runs to two full years thats £120k knocked off, which means....the value of the house is £10k under the deposit and thus they have next to no equity and then interest rates have increased for an extra wammy. So they then may need to stay on a SVR which even at today's super low rates are 4.24-4.74% which takes you to £2.9k/monthWith a a good rainy day fund I wouldn’t count that as too scary on the face of it personally but that’s just me.
On a variable rate obviously a lot riskier. LTV would ease the worries too depending on what the house cost.
Edited by p1stonhead on Thursday 21st September 20:02
The half million pound mortgage needs to be supported by a deposit of say £110k on a £610k house which is just over 80% LTV.
This according to Moneysupermarket is £2000 per month which is fixed for just 2 years on a 25 year mortgage, I am not sure where you get £1700 on £500k, that is equivalent to 0.16% interest over 25 years.
p1stonhead said:
£500k over 25years with £250k deposit is little over £2k on a 5 year fix at nationwide.
I know as me and the missus debated buying a place which would have been nearly identical to the above not too long ago. Didn’t in the end but it’s available.
So a much larger deposit than average, and not £1700 but £2000I know as me and the missus debated buying a place which would have been nearly identical to the above not too long ago. Didn’t in the end but it’s available.
https://www.moneysupermarket.com/mortgages/results...
anonymous said:
[redacted]
This crazy inflation resonates with me, it's whats playing out around my way. Trouble is, with every property in that range, there's been someone buying. Recently one sold and the EA said we were the under bidder. The winning bid was well above ours and , to quote the EA, "was frankly silly". The pain is, that's one person has now set the new level for that sort of home.
Point being, it only takes one sale to lift the new norm.
Sa Calobra said:
Dropping 900k on a first home?
Does it have character features? Nowhere else in London? Can you wait 1-2years for the true bottom in the market?
Unfortunately that's the going price (currently) for decent 2 beds in the area I want to live in.Does it have character features? Nowhere else in London? Can you wait 1-2years for the true bottom in the market?
Nothing particularly fancy at all.
I just don't won't to compromise, I'm 34 and been renting all my life, I don't care about getting a "better deal" by buying in an up and coming area (read: s
t area with potential to become super expensive), I just want somewhere where I know I'll be happy for a few years. And get on the ladder and stop paying somebody else's mortgage. I can wait no probs, I just fear that I might lose potentially the only viable buying window I have given my budget. If prices go up by even just 10% I'll be priced out and who knows when I'll ever be able to afford to buy in south ken again.
Re: London salaries - plenty of people include myself who make a good wage.
What I really struggled with was putting together 100k+ in savings to put a deposit down. Even with high London salaries it's not that easy to save that kind of cash in a reasonable time frame.
I didn't put any thought into whether my house would appreciate (or otherwise!) before buying it.
I just wanted to buy one. So found one suitable, well within budget, scraped a deposit together and bought it.
It was bought 3 years ago and will be paid off in 14 years. Then I have a shelter to live in for the rest of my life.
I can't believe people are so petty/OCD about the market etc. Just buy a bloody house.
I just wanted to buy one. So found one suitable, well within budget, scraped a deposit together and bought it.
It was bought 3 years ago and will be paid off in 14 years. Then I have a shelter to live in for the rest of my life.
I can't believe people are so petty/OCD about the market etc. Just buy a bloody house.
Shnozz said:
There are only two apartments on rightmove in excess of £1m in Manchester. Hardly brimming with them.
I said 'several' not brimming, most of the big penthouses here are owner occupied and don't come on sale often, there will be some high end new builds n the market soon though but I'm not sure what your point is anyway.Edited by WCZ on Friday 22 September 11:30
TheLordJohn said:
I didn't put any thought into whether my house would appreciate (or otherwise!) before buying it.
I just wanted to buy one. So found one suitable, well within budget, scraped a deposit together and bought it.
It was bought 3 years ago and will be paid off in 14 years. Then I have a shelter to live in for the rest of my life.
I can't believe people are so petty/OCD about the market etc. Just buy a bloody house.
Say that to people that have lost their homes in a market crash - sorry but short sighted/naive but not entirely surprised, there is a reason it has taken so long for people to cotton on.I just wanted to buy one. So found one suitable, well within budget, scraped a deposit together and bought it.
It was bought 3 years ago and will be paid off in 14 years. Then I have a shelter to live in for the rest of my life.
I can't believe people are so petty/OCD about the market etc. Just buy a bloody house.
Also where did you buy (as local conditions vary), and less of a concern in the sub £400k market as exposure is less (although of course depending on salary multiples - sorry I am very 'conditioned' to the London market). Also you say well within budget, alot of the people here are talking about London which typically means flats in the range of £400-900k and houses ranging from £800k-£1.5m, even outside of London multiples are typically a big stretch/impossible for people. So whilst you may have had a massive buffer, the majority are not in that position.
One of my colleagues had the same stand point as you when he bought a house last year (although he was absolutely certain that prices would keep rise, so stopped thinking), now they are expecting a baby and want somewhere larger. However they are stuck, as the house prices have fallen (albiet modestly - about £20k) and they had to drop about £20k on stamp duty, and guess what...they would need another £25k (stamp duty) for the house they were looking at (it is a different areas, but presumably that would have dropped a little as well given it is not a million miles away). Add that little lot up and thats £65k (or arguably £40k given you will always need to pay stamp duty) down in one year (without legals/arrangement fees) and they are now stuck as a result.
anonymous said:
[redacted]
I think the Bristol market is still hot, but haven't really looked at any figures there, would be interested to know how that goes!
matrignano said:
Unfortunately that's the going price (currently) for decent 2 beds in the area I want to live in.
Nothing particularly fancy at all.
I just don't won't to compromise, I'm 34 and been renting all my life, I don't care about getting a "better deal" by buying in an up and coming area (read: st area with potential to become super expensive), I just want somewhere where I know I'll be happy for a few years. And get on the ladder and stop paying somebody else's mortgage.
I can wait no probs, I just fear that I might lose potentially the only viable buying window I have given my budget. If prices go up by even just 10% I'll be priced out and who knows when I'll ever be able to afford to buy in south ken again.
Re: London salaries - plenty of people include myself who make a good wage.
What I really struggled with was putting together 100k+ in savings to put a deposit down. Even with high London salaries it's not that easy to save that kind of cash in a reasonable time frame.
the budget you have at your age as a FTB must put you in the top 0.1% of FTBs, that's an astonishing budget (or maybe I'm out of touch?). It's shocking to think you're struggling to find your first home with that to spend.Nothing particularly fancy at all.
I just don't won't to compromise, I'm 34 and been renting all my life, I don't care about getting a "better deal" by buying in an up and coming area (read: s
t area with potential to become super expensive), I just want somewhere where I know I'll be happy for a few years. And get on the ladder and stop paying somebody else's mortgage. I can wait no probs, I just fear that I might lose potentially the only viable buying window I have given my budget. If prices go up by even just 10% I'll be priced out and who knows when I'll ever be able to afford to buy in south ken again.
Re: London salaries - plenty of people include myself who make a good wage.
What I really struggled with was putting together 100k+ in savings to put a deposit down. Even with high London salaries it's not that easy to save that kind of cash in a reasonable time frame.
South Ken has been pricey forever. You pays your money and takes your choice. Few will understand the need to be in south ken at that price, but it's not their money.
I bought this last Friday:
http://www.rightmove.co.uk/property-for-sale/prope...
Didn't seem any 1st time buyers were interested, tho it was hardly unaffordable.
Was a bit miffed at not getting it for £18k.
20 years ago it would have cost £15k and in the last 3 months (since the picture) the exterior's had a major renovation plus posh new entrance door and door entry system installed.
http://www.rightmove.co.uk/property-for-sale/prope...
Didn't seem any 1st time buyers were interested, tho it was hardly unaffordable.
Was a bit miffed at not getting it for £18k.
20 years ago it would have cost £15k and in the last 3 months (since the picture) the exterior's had a major renovation plus posh new entrance door and door entry system installed.
drainbrain said:
I bought this last Friday:
http://www.rightmove.co.uk/property-for-sale/prope...
Didn't seem any 1st time buyers were interested, tho it was hardly unaffordable.
Was a bit miffed at not getting it for £18k.
20 years ago it would have cost £15k and in the last 3 months (since the picture) the exterior's had a major renovation plus posh new entrance door and door entry system installed.
Grim.http://www.rightmove.co.uk/property-for-sale/prope...
Didn't seem any 1st time buyers were interested, tho it was hardly unaffordable.
Was a bit miffed at not getting it for £18k.
20 years ago it would have cost £15k and in the last 3 months (since the picture) the exterior's had a major renovation plus posh new entrance door and door entry system installed.
What will that rent for?
okgo said:
Grim.
What will that rent for?
I really don't know why you think it's 'grim'. It's not grim at all. With the external refurb it's actually quite nice. What will that rent for?
If my circumstances were (or become) different I'd be happy to live in it myself.Currently occupied at £350pcm but with luck the next tenant'll be DSS which'll bring £400pcm.
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