How far will house prices fall [volume 5]

[NickCQ]

Sheepshanks said:

I think you said you'd already dropped the price £15K? You've left money on the table there, but if you're happy.....

Happy is relative... the pre-COVID agreed price is sort of irrelevant given how much the world has changed (and was with a different set of buyers anyway).

[Digga]

kingston12 said:

We didn’t of course, but it shows that if people are aware of your financial situation, they won’t hesitate in asking for more.

Works both ways of course; if someone gets wind of a party being desperate to sell, due to financial problems, then the unscrupulous will kick them in the balls, under threat of pulling out if the price isn't dropped.

[kingston12]

number2 said:

13 months is too long to think about. The house bought is unlikely to have still been on the market now.

Six weeks, fair enough but not over a year.

I bought 13 months ago and the 15k saving then would have been nice. But that was then.

Totally, CV19 wasn’t even on the radar 13 months ago, so there was very little chance of a stamp duty cut. We’re in a completely different place now.

I do feel sorry for people who have recently exchanged and won’t get this discount, although I think that some stamp duty cuts have been widely expected since the start of CV19.

[PrinceRupert]

ooid said:

I feel like we have been completely robbed really. Completed my purchase literally 13 months ago, the STAMP duty was around 16000 GBP. With the new reductions, it would have been only 3000 GBP?

Thirteen months is a long time ago. We paid 9k just a couple of months ago and would be 0 today. Plenty will have paid chunky sums last week.

[p1stonhead]

Digga said:

kingston12 said:

We didn’t of course, but it shows that if people are aware of your financial situation, they won’t hesitate in asking for more.

Works both ways of course; if someone gets wind of a party being desperate to sell, due to financial problems, then the unscrupulous will kick them in the balls, under threat of pulling out if the price isn't dropped.

Speaks volumes about the person who would do that as many here have agreed with. In my mind once a price is agreed its done.

Anyone who tries to change it for a reason outside of say a major defect on the survey, is a prize prick.

[lampchair]

p1stonhead said:

Digga said:

kingston12 said:

We didn’t of course, but it shows that if people are aware of your financial situation, they won’t hesitate in asking for more.

Works both ways of course; if someone gets wind of a party being desperate to sell, due to financial problems, then the unscrupulous will kick them in the balls, under threat of pulling out if the price isn't dropped.

Speaks volumes about the person who would do that as many here have agreed with. In my mind once a price is agreed its done.

Anyone who tries to change it for a reason outside of say a major defect on the survey, is a prize prick.

Yup, its not how you play dice either way.

I don’t offer someone a job and then lowball them before their start date.

[AyBee]

NickCQ said:

Well... if you don’t ask you don’t get.

As of this AM the buyer and I have agreed to split the windfall so that he is up £10k and I am up £5k. As you might expect, he is still on balance pretty happy about the whole thing!

I am glad he showed a little more maturity than those on this thread that would have thrown their toys out of the pram to ‘teach me a lesson’

Except he's down £5k, it's his windfall that should have been £15k Will be interesting to see if he finds things in the survey or shortly before exchange which equate to an additional £5-10k since you've now shown that the agreed price isn't actually the agreed price

[NickCQ]

AyBee said:

Except he's down £5k, it's his windfall that should have been £15k Will be interesting to see if he finds things in the survey or shortly before exchange which equate to an additional £5-10k since you've now shown that the agreed price isn't actually the agreed price

All part of the game

[caymanbill]

NickCQ said:

I am clearly not as rich as you. £15k is real money to me.

By the sounds of it you're far more well off then I am.

That £15K is also real money for your buyers. Stop being greedy

[caymanbill]

V6Alfisti said:

He could comfortably before they pulled recognition of his wife's salary (pre maternity) and his bonus, as such he was getting mortgage offers easily in Feb.

He is putting in more than a 1/3rd as a deposit into a sub 1m house. However mortgage companies just aren't recognising what they used to.

Just a bit of a rubbish situation, when the rug gets pulled from you.

Edited by V6Alfisti on Wednesday 8th July 20:26

Do you know why they aren't recognising his bonus?

[Shnozz]

kingston12 said:

Totally, CV19 wasn’t even on the radar 13 months ago, so there was very little chance of a stamp duty cut. We’re in a completely different place now.

I do feel sorry for people who have recently exchanged and won’t get this discount, although I think that some stamp duty cuts have been widely expected since the start of CV19.

I agree. Like many during this pandemic, there will be winners and losers. I am self-employed, but structured through a limited so watched on as s/e were handed £2.5k PCM top up whilst under no obligation to cease working. Nice little enhancement to a salary. Same with the grants dished out on "commercial" property. Fall just below and you receive nothing, yet some were reporting multiple holiday lets all sat separately all eligible for £10k a pop.

[V6Alfisti]

caymanbill said:

Do you know why they aren't recognising his bonus?

Yes, it's simply because a large part of the mortgage market aren't recognising the full level of bonus or any of the pre-maternity pay in light of covid-19.

Simply because mortgage companies are afraid that bonuses won't be paid and jobs post maternity vanish.

My friend mentioned the bonus wasn't being recognised, whilst it seems like some do but at a much lower percentage.

Seemingly at the value he is looking at (even with a good LTV), brokers just can't get near what he was being offered in Feb.

e.g.

https://www.mortgagestrategy.co.uk/news/halifax-cu...
https://www.ft.com/content/1d94820c-b69b-4e09-9323...
https://www.homesandproperty.co.uk/mortgages/natio...

Edited by V6Alfisti on Thursday 9th July 16:59

[kingston12]

Shnozz said:

I agree. Like many during this pandemic, there will be winners and losers. I am self-employed, but structured through a limited so watched on as s/e were handed £2.5k PCM top up whilst under no obligation to cease working. Nice little enhancement to a salary. Same with the grants dished out on "commercial" property. Fall just below and you receive nothing, yet some were reporting multiple holiday lets all sat separately all eligible for £10k a pop.

That's very much what the response has been like. It will have cost me a lot of money overall, but Ill probably try to never sit down and work out how much for the sake of my own sanity!

I don't think that there are many winners at all out of a stamp duty holiday, it is just designed to make people feel better off. We've already seen an example on this thread about how a previously agreed sale price has been negotiated up as a result, so how many properties listed going forward won't have the stamp duty holiday 'priced in'.

The only groups I can see being better off are:

First time buyers who will now have a bigger deposit
Sellers of second properties who can now ask more, but don't have to buy another at a a higher price
Property developers who have offered to pay stamp duty bills as an incentive to shift their new builds (example of this being discussed in another thread).

[kingston12]

V6Alfisti said:

Yes, it's simply because a large part of the mortgage market aren't recognising the full level of bonus or any of the pre-maternity pay in light of covid-19.

Simply because mortgage companies are afraid that bonuses won't be paid and jobs post maternity vanish.

My friend mentioned the bonus wasn't being recognised, whilst it seems like some do but at a much lower percentage.

Seemingly at the value he is looking at (even with a good LTV), brokers just can't get near what he was being offered in Feb.

e.g.

https://www.mortgagestrategy.co.uk/news/halifax-cu...
https://www.ft.com/content/1d94820c-b69b-4e09-9323...
https://www.homesandproperty.co.uk/mortgages/natio...

Edited by V6Alfisti on Thursday 9th July 16:59

Whilst clearly bad news for your friend in the short term, it would probably be better overall if all mortgage lenders were to become a bit more prudent, and the market corrected a little as a result.

[V6Alfisti]

kingston12 said:

Whilst clearly bad news for your friend in the short term, it would probably be better overall if all mortgage lenders were to become a bit more prudent, and the market corrected a little as a result.

Totally, I don't disagree although some jobs are heavily bonus based. It's more the high multiples and previously high ltvs that are questionable.

Edited by V6Alfisti on Thursday 9th July 17:40

[Sheepshanks]

kingston12 said:

Whilst clearly bad news for your friend in the short term, it would probably be better overall if all mortgage lenders were to become a bit more prudent, and the market corrected a little as a result.

Maybe go back to taking only one income into account? That'd mess property prices up!

[kingston12]

Sheepshanks said:

kingston12 said:

Whilst clearly bad news for your friend in the short term, it would probably be better overall if all mortgage lenders were to become a bit more prudent, and the market corrected a little as a result.

Maybe go back to taking only one income into account? That'd mess property prices up!

They could go back to the old-fashioned way of only offering 3.5x income as well, that would certainly do it!

In all seriousness, I wonder how much of an issue the government are going to have with the lenders becoming more risk averse. Rishi Sunak has plenty of newly printed money to throw at the market from his end, but these are inflationary measures and he'll need to the banks keep lending if they are going to work properly.

Edited by kingston12 on Thursday 9th July 21:37

[Mining Subsidence Man]

Mining stuff is picking up here, which suggests that it's either a blip, or people are getting back to "normal"

[V6Alfisti]

With all the excitement of the stamp duty announcement.

Missed this months RICS

https://www.rics.org/globalassets/rics-website/med...

RICS summary

"Enquiries, agreed sales and instructions all improve noticeably in June
• Prices continue to slip, albeit more moderately than last month
• Twelve-month sales expectations still subdued due to the challenging economic backdrop"

London is the weakest area "he latest figure is a little less
downbeat than that posted in May (-32%). When
broken down at the regional level, London and
the South East currently exhibit the weakest
momentum, returning net balances of -58% and
-33% respectively."

Note: the -xx% is RICS sentiment rating rather than a prediction of % house price falls.

All largely as expected, still signs that the market expect there to be a short boom but will run out of steam (statement by Simon Rubinsohn - chief economist at RICS, based primarily on the tightening lending criteria, uncertain macro environment and particularly unemployment).

https://www.theguardian.com/business/2020/jul/09/u...

Edited by V6Alfisti on Friday 10th July 12:09

[andyeds1234]

Mining Subsidence Man said:

Mining stuff is picking up here, which suggests that it's either a blip, or people are getting back to "normal"

A few days ago, you said mining work was down the tubes, a few days later it’s getting back to normal?
I think a longer term view might be in order...