How far will house prices fall [volume 4]
Discussion
Justayellowbadge said:
Why not do the work pre-sale?
I know this sounds like one of those horrible PH company directory clichés, but I just didn't need the extra money enough to want the hassle of doing more work to the place. Plus I wanted to move quickly, and while sorting out all the little things wouldn't have been expensive, it would have been time-consuming.We found buyers easily enough and still got more than I expected for it, so although there's the potential for "what if..." involved in speculating about what the place would have made with a sparkly kitchen, flat ceilings and new windows, I don't really think about it given I got a price I was happy with and someone else found a house they liked.
(Plus if you have an agent handling all the viewings, it doesn't really matter whether the offer rate is 50% or 5%, as long as you get a few decent ones eventually.)
Sheepshanks said:
soxboy said:
Possibly veering O/T, but there is definitely a number of people who are pretty hopeless at DIY.
I'm 43 and compared to my dad and my father-in-law I consider myself average at DIY. My skills are OK but I have quite a good idea of what can and can't be done, and how things can be reconfigured. Most of my friends (all of a same age) would not know where to start and have been in awe at what we've managed on our houses over the years, which I actually find a bit embarrassing rather than flattering.
One of my son-in-laws won't even attempt putting Ikea stuff together. The other one will do it, but will break something. I'm still not sure which is best.I'm 43 and compared to my dad and my father-in-law I consider myself average at DIY. My skills are OK but I have quite a good idea of what can and can't be done, and how things can be reconfigured. Most of my friends (all of a same age) would not know where to start and have been in awe at what we've managed on our houses over the years, which I actually find a bit embarrassing rather than flattering.
i've often it should it be relatively easy to take the measurements of a property for sale and knock up a fly though/drawing of what it looks like empty and with neutral colours throughout. A lot of people do have trouble being able to visualise things and seeing past the existing clutter. I know most older properties come with a floorplan but a 3D show-home type thing would more helpful.
soxboy said:
stuckmojo said:
anonymous said:
[redacted]
You may want to check your figures for the real world. Some mortgages are less than rent, but with rent you don't have to redecorate or spend a penny on the house. Young people are skint. (not all of them, obviously).
IF they have enough for the deposit (through bank of boomer mum and dad) and fees, they won't have the money for the upgrades/kitchen/decorations/furniture and so on. It's obvious. Otherwise they would buy the house and fix what they want fixed (I did that, but I'm not representative of the bulk of the FTB market).
It's not a matter of "they are lazy/unimaginative/not entrepreneurial/workshy/imbeciles. They are not idiots, they are just too poor for the current price levels.
btw. I do actually know it's awful paint because I've worked in paint factories and I know the process and what good and bad quality looks like, and this opinion is shared also by many many painter/decorators.
I actually had an interior decorator recommend one of these fancy pants paints on some of my walls, so I got some Johnsons colour matched and used that... and when she came to look at the finished room of course she thought it was the fancy ass paint and commented on how lovely it looked. I rest my case.
soxboy said:
Possibly veering O/T, but there is definitely a number of people who are pretty hopeless at DIY.
I reckon some of this goes hand in hand with Generation Rent. If something breaks, you call the landlord. You're discouraged from trying to fix something yourself, because if you try and then get it wrong, this will now (quite rightly) be your problem rather than the landlord's. Similarly, you're unlikely to do any decorative work beyond the time-honoured ritual of filling in a picture hook hole and dabbing some trade magnolia over the top.As a result, you get people well into their thirties who have never even pulled out a washing machine to see where the water puddle is coming from, let alone tile a kitchen or fit a tap. More to the point, the idea of living in a house and slowly improving it is a completely alien concept, because they've lived a significant proportion of their adult lives without ever having had that experience.
Timberwolf said:
anonymous said:
[redacted]
I had the same experience selling my place at the start of the year. First time buyers all over it (2 viewings/day from the point it went on the market to the point I accepted an offer) but they'd feed back that while they loved the base house, the kitchen cabinets needed replacing, or the windows were old, or that a few rooms could do with a good skim and repaint, and move on. Not even try a cheeky, "make an offer £25k below asking and see what happens" - just move on.The agent said that most of them ended up bidding on 2-bed flats around the same price point because they wanted brand new fixtures and fittings. They were aware that a 3-bed house in a nicer bit of town had far more potential, but just couldn't get themselves over it being a bit tired inside and out. We did eventually find an FTB who had their head screwed on and was prepared to look past a bit of stipple-finish Artex, but I can see why so many of these entry level houses end up going to landlords and developers who know they're only a Howdens kitchen and a bit of plastering away from having quite a nice monthly yield.
The reason 'projects' are fetching relatively high prices these days is that it's a blank canvas, so it appeals as being anything to anyone in terms of finished product. A perfectly finished house is only going to appeal to buyers who have the exact tastes of how it's been done, as people are starting to realise that they'll just end up spending even more to put their own mark on it.
Just a whinge about FTBs and their constant moan re. deposits etc...
When my wife (then fiancé) were saving up for a deposit in '95/96 we rented 1 room in a shared house, drove around in a £500 Fiesta, only went out max. twice a week, didn't go on holiday for a year and basically lived off 1 salary whilst saving the other. By the end of the year we had enough saved for a decent deposit on a 3 bed semi in a nice Sheffield suburb.
The grads in our company all moan how they struggle to save for a deposit yet are renting a house for £600pcm + bills, have a nice car on PCP, go out at least 3 times a week and go on holiday abroad twice a year (eg. 2 weeks in Mexico + skiing!).
When I point out that they could probably save £8-10k by maybe economising more they look at me like I'm mad.
One grad calculated he has spent £26k on rent since he started work!
When my wife (then fiancé) were saving up for a deposit in '95/96 we rented 1 room in a shared house, drove around in a £500 Fiesta, only went out max. twice a week, didn't go on holiday for a year and basically lived off 1 salary whilst saving the other. By the end of the year we had enough saved for a decent deposit on a 3 bed semi in a nice Sheffield suburb.
The grads in our company all moan how they struggle to save for a deposit yet are renting a house for £600pcm + bills, have a nice car on PCP, go out at least 3 times a week and go on holiday abroad twice a year (eg. 2 weeks in Mexico + skiing!).
When I point out that they could probably save £8-10k by maybe economising more they look at me like I'm mad.
One grad calculated he has spent £26k on rent since he started work!
GreatGranny said:
The grads in our company all moan how they struggle to save for a deposit yet are renting a house for £600pcm + bills, have a nice car on PCP, go out at least 3 times a week and go on holiday abroad twice a year (eg. 2 weeks in Mexico + skiing!).
Fail! It's mandatory to mention iPhone(n) in this kind of post. Oh, and that the car on PCP is a white Audi.Timberwolf said:
I reckon some of this goes hand in hand with Generation Rent. If something breaks, you call the landlord. You're discouraged from trying to fix something yourself, because if you try and then get it wrong, this will now (quite rightly) be your problem rather than the landlord's. Similarly, you're unlikely to do any decorative work beyond the time-honoured ritual of filling in a picture hook hole and dabbing some trade magnolia over the top.
As a result, you get people well into their thirties who have never even pulled out a washing machine to see where the water puddle is coming from, let alone tile a kitchen or fit a tap. More to the point, the idea of living in a house and slowly improving it is a completely alien concept, because they've lived a significant proportion of their adult lives without ever having had that experience.
That and having parents that had office jobs. The generations before tended to have manual jobs and no money to pay others to fix things anyway.As a result, you get people well into their thirties who have never even pulled out a washing machine to see where the water puddle is coming from, let alone tile a kitchen or fit a tap. More to the point, the idea of living in a house and slowly improving it is a completely alien concept, because they've lived a significant proportion of their adult lives without ever having had that experience.
I'm good at DIY because my parents grew up on farms.
I'd technically be a very early millennial, although thanks to having older siblings I probably identify with generation X more than most. My point of view is that my generation have two big problems, and careful saving is neither of them:
(And knowing that none of our new neighbours will ever say, "wow, really?" when asked what we do for a living...)
- We want to live in established, popular areas. We're not very good at realising many of these places were unpopular crapholes when their baby boom and gen-X occupants bought there. (Or that those residents started out in a craphole, paid down the mortgage, and then moved.) Or if we do realise it, we're not good at deciding to find our own craphole whose main redeeming feature is its utter cheapness.
- We put way too much weight on having a "dream lifestyle job" or "doing something that makes a real difference" and then wonder why we're getting sidelined out of the market by the people we mock for doing, "something dull in finance or IT".
(And knowing that none of our new neighbours will ever say, "wow, really?" when asked what we do for a living...)
soxboy said:
As a surveyor, from what I've seen the houses that are in strongest demand are either perfect or wrecks. By the time the people who have fought over the wrecks and gone to best & final offers, the bids are in the same ball park as one that is just a bit tatty. There seems to be this idea of doing a Grand Design and having it exactly how you want it, which puts a premium on them.
It's a bit like the classic car market, the 'barn finds' go for silly money and end up costing more than a fully restored example, whereas the shabby ones that you can do up as you go along fetch a lot less.
We have just benefited from this, having bought a 15 year old house that I don't think has had a penny spent on it, so where ones that were in tip top condition flew out of the door, ours just stagnated. We got it at a price that was at least 10% (£35K) less than a good one, yet we've spent only 1/3 of that over the last 4 months bringing it up to the same standard as a top one. Just need to do the garden in the spring and we are there.
It's a bit like the classic car market, the 'barn finds' go for silly money and end up costing more than a fully restored example, whereas the shabby ones that you can do up as you go along fetch a lot less.
We have just benefited from this, having bought a 15 year old house that I don't think has had a penny spent on it, so where ones that were in tip top condition flew out of the door, ours just stagnated. We got it at a price that was at least 10% (£35K) less than a good one, yet we've spent only 1/3 of that over the last 4 months bringing it up to the same standard as a top one. Just need to do the garden in the spring and we are there.
Builders will put pay to that.
Parents just bought a small place, needs a lot of work. Having done a complete gut and refit a year it two back, I thought I had a clue at what it would cost. First quote was FIVE times my estimate.
As an example, they quoted double what my bro paid last year for underfloor heating in a house 3-4 times the size. Absolutely insane. A guy we used quoted and was also way more than my estimate, and lots more than he used to be.....seems prices have really rocketed, even at mates rates. It will definitely impact prices for wrecks, unless everyone is going to be hands on.
I think these days unless you're on a crazy budget or need absolute perfection you've got to be prepared to put some work in yourself. Get the pros to do the structural work, anything like gas or electric, and bring rooms up to the point they're finished in fresh plaster, but pitch in yourself on anything that's easy enough to figure out with a bit of practice. Even doing a reasonably decent plaster skim isn't that hard if you're happy to spend an evening reading up and watching some YouTube videos. Buying tools of an acceptable standard gets a bit expensive but once you've got them, you've got them for life.
My experience was that none of this stuff is ever hard, it just takes a bit of learning and buying a few spares of things so that, for example, you can solder a few practice copper elbows before you make the one that's actually going under the sink. Often even making a mistake and having to go out again to buy new materials still ends up massively cheaper. The downside is all your local trades hate you, because they know you're only going to call them when a job looks like it's going to be a massive pain and involves spending an hour with your head stuck underneath the bath or delving deep into the horrors of 1970s electrics...
My experience was that none of this stuff is ever hard, it just takes a bit of learning and buying a few spares of things so that, for example, you can solder a few practice copper elbows before you make the one that's actually going under the sink. Often even making a mistake and having to go out again to buy new materials still ends up massively cheaper. The downside is all your local trades hate you, because they know you're only going to call them when a job looks like it's going to be a massive pain and involves spending an hour with your head stuck underneath the bath or delving deep into the horrors of 1970s electrics...
GreatGranny said:
Just a whinge about FTBs and their constant moan re. deposits etc...
When my wife (then fiancé) were saving up for a deposit in '95/96 we rented 1 room in a shared house, drove around in a £500 Fiesta, only went out max. twice a week, didn't go on holiday for a year and basically lived off 1 salary whilst saving the other. By the end of the year we had enough saved for a decent deposit on a 3 bed semi in a nice Sheffield suburb.
The grads in our company all moan how they struggle to save for a deposit yet are renting a house for £600pcm + bills, have a nice car on PCP, go out at least 3 times a week and go on holiday abroad twice a year (eg. 2 weeks in Mexico + skiing!).
When I point out that they could probably save £8-10k by maybe economising more they look at me like I'm mad.
One grad calculated he has spent £26k on rent since he started work!
I think FTBs today are faced with a different landscape. When my wife (then fiancé) were saving up for a deposit in '95/96 we rented 1 room in a shared house, drove around in a £500 Fiesta, only went out max. twice a week, didn't go on holiday for a year and basically lived off 1 salary whilst saving the other. By the end of the year we had enough saved for a decent deposit on a 3 bed semi in a nice Sheffield suburb.
The grads in our company all moan how they struggle to save for a deposit yet are renting a house for £600pcm + bills, have a nice car on PCP, go out at least 3 times a week and go on holiday abroad twice a year (eg. 2 weeks in Mexico + skiing!).
When I point out that they could probably save £8-10k by maybe economising more they look at me like I'm mad.
One grad calculated he has spent £26k on rent since he started work!
Particularly in the SE, the deposit required today take a monumental amount of saving. Add to this, you need to max out on a mortgage (as in 96, I'm sure). However, nominally, the values are much larger multiples of income today because of availability of funding, being made to look cheap due to current interest rates.
Years back, if rates moved up, you could cut your cloth and begin to chip away at the loan amount and at least the initial loan was, on average, 2.5-3 times your salary. Today, it's often greater multiples, and on two incomes. Add to this the prospect that rates are most likely to go up over the life of your mortgage (30-40 years now), it's all contributing to a smaller appetite for signing up for a life of debt, particularly when the price increases of the past 10-15 years are not widely expected to continue at the same pace.
Houses have become cash machines, an investment and a one way bet, rather than a home. When that starts easing up, I don't think unreasonable when FTBs show reluctance to get involved. Pointing to iPhones and Audis would be accurate for some, I'm sure. This is often churned out in the press as opinions are often from someone who benefits from prices continuing to rise and it's far easier to say than "well, yes, prices have Increased of late and that may not continue, so who can blame FTBs for not committing right now? ".
GreatGranny said:
When my wife (then fiancé) were saving up for a deposit in '95/96 we rented 1 room in a shared house, drove around in a £500 Fiesta, only went out max. twice a week, didn't go on holiday for a year and basically lived off 1 salary whilst saving the other. By the end of the year we had enough saved for a decent deposit on a 3 bed semi in a nice Sheffield suburb.
In 1996 houses were (in real terms and possibly nominal) about the cheapest they've been in the last thirty years. I know of a number of people of a similar sort of age to us who bought properties on a single wage, and some of whom have made a substantial windfall off them.This chart shows nominal asking prices. Bear in mind that inflation was high until the mid-nineties, and has been low ever since, so the drop after 1989 looks shallower than it might have otherwise been.
Wage growth was running at 3% to 4% in the run up to 2008, but has been pretty stagnant since then. The median house price has quadrupled, but incomes haven't kept up, and I'd guess that property is now two or three times as expensive as it was.
It's easy for people who've done very well out of the property boom of the last twenty years to criticise those who can't buy into the market. The fact is that a deposit is significantly larger now, and increases in rent mean less disposable income can be saved.
For example, it was possible to buy an apartment in London on a single wage for a graduate in the early stages of his or her career in the 1990s. These days, they're likely to be paying a very large chunk of their income to rent a room in a shared house.
Graemsay said:
For example, it was possible to buy an apartment in London on a single wage for a graduate in the early stages of his or her career in the 1990s.
That was not my experience. I started a chartered accountancy training contract as part of an early 1990s intake at a big firm. Those who bought over the next 5 or so years did so with deposits from BOMAD and the innovation of the day, a “shared” mortgage from the Portsmouth Building society. Typically a 2 bed flat in a stabby area like Stockwell. Some went on to suffer terrible hardship for a period when interest rates were in double digits. I recall two friends whose mortgage repayments almost exceeded their combined net salaries at one point. I think that my starting salary was approx £12k, and that 2-bed flats in the East End or South London were around £80k. Buying a place then felt totally out of reach to me, so I rented a room in a shared house with 3 other trainees. With two better post-qual salaries and after the mid 90’s price wobble I made my first purchase with my then girlfriend in 1996. We had - frankly - neither furniture nor proper food for the first few years we were there.
Whilst I am sure that prices have been inflated to the point where it is really tough to get started, I am less sure that this is a wholly new phenomenon.
Chris Type R said:
Down the road from us:
Added to RM 13 Nov 2016 at £3,750,000 - http://www.rightmove.co.uk/property-for-sale/prope...
Relisted 20 Oct 2017 at £2,500,000 - http://www.rightmove.co.uk/property-for-sale/prope...
The only nice part of that build is images 26&27.Added to RM 13 Nov 2016 at £3,750,000 - http://www.rightmove.co.uk/property-for-sale/prope...
Relisted 20 Oct 2017 at £2,500,000 - http://www.rightmove.co.uk/property-for-sale/prope...
Edited by Chris Type R on Tuesday 31st October 16:26
I can imagine someone who owns that has fake breast implants and drives a RR that never sees mud in it's life.
Hideous
Sa Calobra said:
Chris Type R said:
Down the road from us:
Added to RM 13 Nov 2016 at £3,750,000 - http://www.rightmove.co.uk/property-for-sale/prope...
Relisted 20 Oct 2017 at £2,500,000 - http://www.rightmove.co.uk/property-for-sale/prope...
The only nice part of that build is images 26&27.Added to RM 13 Nov 2016 at £3,750,000 - http://www.rightmove.co.uk/property-for-sale/prope...
Relisted 20 Oct 2017 at £2,500,000 - http://www.rightmove.co.uk/property-for-sale/prope...
Edited by Chris Type R on Tuesday 31st October 16:26
I can imagine someone who owns that has fake breast implants and drives a RR that never sees mud in it's life.
Hideous
Surprised they haven't had a go at getting it running bearing in mind the 1.25mill price reduction.
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