How far will house prices fall [volume 5]

How far will house prices fall [volume 5]

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Discussion

ooid

2,107 posts

59 months

Tuesday 27th October
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princeperch said:
Hopefully you are using the stow brothers or have at least had a chat with them. They seem to have the knack of being to able to polish a poo, I've seen them get top money for some absolute rubbish recently and their better stock also seem to get very strong money too.
Yup, actually invited them first! literally I was thinking the same but I had to say, I did not think their research & valuation was strong enough. Invited two more agents (fairly big and local), one of them was bang on the asking price, and I decided to go ahead. I'm travelling again this week for work unfortunately, but if you are free we might catch up in the flats or nearby park after next week for further details (Local Covid-19 advice laugh)

ooid

2,107 posts

59 months

Tuesday 27th October
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number2 said:
Good luck! beer.

Moving out of east London and to SE/Kent?
Cheers! Yup, I'm planning to flood here with more SE listings/questions in the near future, if things go ahead without any trouble but knowing my luck, I doubt it! hehe


princeperch

6,538 posts

206 months

Tuesday 27th October
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ooid said:
Yup, actually invited them first! literally I was thinking the same but I had to say, I did not think their research & valuation was strong enough. Invited two more agents (fairly big and local), one of them was bang on the asking price, and I decided to go ahead. I'm travelling again this week for work unfortunately, but if you are free we might catch up in the flats or nearby park after next week for further details (Local Covid-19 advice laugh)
Ha yes sure- we should perhaps go for a pint (outside) at least before you move.

princeperch

6,538 posts

206 months

Thursday 29th October
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https://www.rightmove.co.uk/property-for-sale/prop...

When the agent describes it as delapidated then you know it's going to be bad. But it's condition obviously isn't reflected in the asking price. Another example of how in some ways in some markets the internal/overall condition isn't the driver of the marketing price, it's the location that's key.

NickCQ

3,232 posts

55 months

Thursday 29th October
quotequote all
princeperch said:
https://www.rightmove.co.uk/property-for-sale/prop...

When the agent describes it as delapidated then you know it's going to be bad. But it's condition obviously isn't reflected in the asking price. Another example of how in some ways in some markets the internal/overall condition isn't the driver of the marketing price, it's the location that's key.
Makes sense - renovation cost is correlated to size not land value.
For a property like that, most buyers would be expecting to extend at the back (side return) and put a loft conversion in anyway.

z4RRSchris

9,570 posts

138 months

Thursday 29th October
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finally got round to doing all the land reg research on the little collection of streets I want to live on:

since Jan 18 have been 41 sales, of which only 3 are over £700k (£705k, £710k, £835k) discounts typically 3-5% but upto 17%.

currently 15 properties for sale, 10 of which are over £700k, 7 of the 15 have been reduced.

an example is house on at £750k, reduced from £775k. Non extended needs work. Last sale on the street of same stock was at £665k in December 18.Only sales above £700k on the street were in 15 and 16, for fully extended houses (£772k, 795k)

Am I detached from reality, or are the sellers detached form reality? whats going on?

I don't have the past 3 months of data obviously.


ooid

2,107 posts

59 months

Thursday 29th October
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What was the initial agent reaction? They probably have another offers if they stay too cool, as you probably know more than any of us with experience! cool


z4RRSchris

9,570 posts

138 months

Thursday 29th October
quotequote all
ooid said:
What was the initial agent reaction? They probably have another offers if they stay too cool, as you probably know more than any of us with experience! cool
oh i've forgotten about that house now, moved on. I asked for a price to deal, they said asking so I said no thanks. They said they had another offer yesterday so good luck to them. My offer was 7.6% off and would have moved higher had they given me a deal price. Asking was £875k

I just cant see how the current asking prices are so over the historical comps, has the market really moved 20% during lockdown. I don't think so?


z4RRSchris

9,570 posts

138 months

Thursday 29th October
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I actually think working in the industry and thinking rationally harms your chances, you do too much DD. After being on the sellers side of over a billion of sales I cant help myself.

Most people view it once or twice, and offer 10 grand under the asking and away they go!


ooid

2,107 posts

59 months

Thursday 29th October
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Is that perhaps related to the limited stocks of flats and cladding issue? (also lack of demand) Many can't afford or would not chose to buy flats anymore, so limited housing stock getting more exposure, at least in many E3 areas at the moment. Many got stuck can't sell and move on.

NickCQ

3,232 posts

55 months

Thursday 29th October
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z4RRSchris said:
an example is house on at £750k, reduced from £775k. Non extended needs work. Last sale on the street of same stock was at £665k in December 18.Only sales above £700k on the street were in 15 and 16, for fully extended houses (£772k, 795k)
Interesting exercise

First add back £15k for the stamp duty cut, so your £665k comp is now £680k
Two years of growth at c. 3% pa gets that comp to £725k

Reduced asking price of £750k sounds about right if they want to deal at £725k
Clearly 3% growth is a made up number but you get the thought process..

z4RRSchris

9,570 posts

138 months

Thursday 29th October
quotequote all
NickCQ said:
Interesting exercise

First add back £15k for the stamp duty cut, so your £665k comp is now £680k
Two years of growth at c. 3% pa gets that comp to £725k

Reduced asking price of £750k sounds about right if they want to deal at £725k
Clearly 3% growth is a made up number but you get the thought process..
true, but then in this specific area the market looks very flat, i.e negative in real terms.

another example:

sold £850k in October 15.
Listed £885k in August 20
Increased to £895k in August 20 (they got the price wrong it seems)
Reduced to £875k in September 20
Reduced to £850k in October 20

The house on the other side of the road has just sold for something (asking was £750k) but North facing garden which is why I didn't want it.

gibbon

2,103 posts

166 months

Thursday 29th October
quotequote all
princeperch said:
https://www.rightmove.co.uk/property-for-sale/prop...

When the agent describes it as delapidated then you know it's going to be bad. But it's condition obviously isn't reflected in the asking price. Another example of how in some ways in some markets the internal/overall condition isn't the driver of the marketing price, it's the location that's key.
I think the condition is exactly reflected in the price, it would be marketed at £950k done up, probably goes for £900k.

£200-£250k to totally renovate / small extension? Sounds about right to me.

NickCQ

3,232 posts

55 months

Thursday 29th October
quotequote all
z4RRSchris said:
true, but then in this specific area the market looks very flat, i.e negative in real terms.

The house on the other side of the road has just sold for something (asking was £750k) but North facing garden which is why I didn't want it.
Will be interesting to see what that one has gone for.

My anecdotal feeling (in London at least) is that there was a mini-peak in 2014/15 that went backwards for a year or so but got going again in 2017/8.
It would not surprise me if values today were in line with 2015 but up 5-10% versus 2-3 years ago.

I ended up getting to full asking for the property we agreed to buy in September. Vendors had previously accepted an offer at that level a few weeks before, which fell through, and seemed prepared to wait it out. Time will tell whether that was a dumb strategy

z4RRSchris

9,570 posts

138 months

Thursday 29th October
quotequote all
I would pay full asking if that's what I thought it was worth, the data at the moment doesn't make any logical sense.

say 2014/16 was the peak, then the 2 sales at £772k and 795k should be the peak comps, fully extended properties.

That means the current listing fully extended should be worth 800 perhaps 825k, take off £150k of work gets you to 650/675k against the asking of £750k

NickCQ

3,232 posts

55 months

Thursday 29th October
quotequote all
z4RRSchris said:
That means the current listing fully extended should be worth 800 perhaps 825k, take off £150k of work gets you to 650/675k against the asking of £750k
I don't think you can expect 1 for 1 uplift in value based on extension cost any more.
Buying the cheapest un-extended house on the best street used to be a good strategy, but with the general inflation in the cost of doing these projects it doesn't see so any more.

The place we are buying is £75k below the 'record' for the street, but you would have to do the side return in to make it equivalent on a £/sqft basis.

PrinceRupert

9,251 posts

44 months

Thursday 29th October
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Things seem to be slowing down a bit - there are now three houses for sale on my street, one had went SSTC within a week of going up but seems to have fallen through. Two have been for sale for at least a month.

number2

1,390 posts

146 months

Thursday 29th October
quotequote all
NickCQ said:
I don't think you can expect 1 for 1 uplift in value based on extension cost any more.
Buying the cheapest un-extended house on the best street used to be a good strategy, but with the general inflation in the cost of doing these projects it doesn't see so any more.

The place we are buying is £75k below the 'record' for the street, but you would have to do the side return in to make it equivalent on a £/sqft basis.
Yeah, it depends of course, but in my (residential/personal) experience the cost of refurb etc. doesn't get paid back.

V6Alfisti

3,149 posts

186 months

Thursday 29th October
quotequote all
gibbon said:
I think the condition is exactly reflected in the price, it would be marketed at £950k done up, probably goes for £900k.

£200-£250k to totally renovate / small extension? Sounds about right to me.
You beat my question.

I can't see how two houses next to each other, identical in size e.t.c but one is in pieces and the other immaculate wouldn't have a price difference.

Adding an extension to the back doesn't result in the rest of the inside of an immaculate houses needing to be done.

untakenname

3,270 posts

151 months

Thursday 29th October
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Noticed this article about how people are managing their money during Covid which was being shared online due to her spending £800 per month on fitness, found this part about her BTL 'empire' quite interesting.

inews said:
It has been tricky this year as a tenant in one of my Canary Wharf flats moved out at the beginning of lockdown and I couldn’t find another tenant for four months. I’ve now managed to let the flat but before the pandemic I was getting closer to £1,800 a month in rent, and now it’s dropped to £1,400.

Another tenant also stopped paying the rent for two months, although has since restarted. Thankfully I was still working because I was covering the cost of everything and still had mortgages to pay.

I want to sell both the Canary Wharf flats as they are proving to be a nuisance. The service charge combined is £4,000 a year. By the time I’ve also paid agency fees the rent is no longer covering the costs and this year I’ll make a big loss on my properties.

Unfortunately I can’t sell at the moment because of the new fire regulations
https://inews.co.uk/inews-lifestyle/money/how-mana...