Altrincham/hale/halebarns

[Nomadd]

You are mistaking the Republic of Ireland and Northern Ireland. In Southern Ireland there was a huge housing boom - over 250,000 excess houses/apartments were built with no-one to buy them. Result FTB priced out -- Banks collapsing -- developers bankrupt -- apartment prices in Dublin down 60%.

In the North - part of the UK ---there was some apartment building granted but nowhere near the scale of the South. We have only a very few ghost estates that are uncompleted -- mostly of houses/apartments built in the wrong area to sell.

In the North there was a lot of speculative buying of houses/apartments by Southern investors and professional classes - in fact anyone with a pulse could get a 100%loan. The FTBs were priced out immediately (the fortunate ones that is --the unlucky ones stretched so far that bankruptcy is their only way out) and they are only now coming back in to the market.

When the party suddenly ended in 2008 there was a brief hiatus then prices started falling dramatically. Investors started bailing out and developers went bust.

I have property magazines from 2007 and prices were astronomical - we actually had a bubble on a bubble and houses in Belfast were more expensive than London at one point.

So what we have now is the top bubble blown off but I am waiting for the second bubble to go from the middle market of detached houses before I buy.

Cheers for that. Puts the situation over there in much better perspective.

I agree with your sentiment, hence why I haven't 'jumped in' and purchased myself. The pressure on wages, the rise in living costs, unemployment, bank lending tightening, etc., all seem to point to a continuing bleak picture for the UK for the next 5 years at least, IMHO. That's why I'm happy to ignore houses that are painted as seemingly 'marginal' now - especially when the rental costs are half the mortgage repayment costs - and that's at current IR levels - and before the many tens of thousands of pounds of purchase costs and ongoing running costs are factored in.

I am surprised by how many seem to have 'thrown in the towel' and purchased on the main forum, especially those who have paid £500k+ for a small house/flat in the SE/London. It seems to be just about the wrong time to do it, IMHO. I've a feeling that that 'second bubble' blowing off you mention is just around the corner (in fact, in the NW, it's the larger detached houses that have already seen the steepest declines - and that doesn't seem to be abating by the amount of 'sticking' property I'm seeing.)

As ever, we pays our money and makes our choice. Or not.

[Democorruptcy]

Indeed.

My original point was STR cash pot v yield it generates for that house. In which case it works out at a marginal 'buy' rather than 'rent' on those numbers. If it sold at say 7% below asking (I think that's still the national average?? but not sure if it's different here), that would be around £290k which makes it increasingly less marginal.

Other houses and/or mortgage LTVs will skew that in different ways of course. It seems to be indicative of some rents starting to push the implied yield up (in this area), which starts to alter the rent v buy argument during this period of financial repression. Which of course is its primary purpose.

It's also one of the advantages of being a cash buyer in a depressed market where credit is tight.

I wanted to add some value to saving more money while you were renting in that each £1 off the purchase price also saves you the mortgage interest which might double it. That doesn't work if you are looking at a set £310k pot suffering from suppressed interest rates.

However.... what could happen is that if you keep your cash aside for house A at £310k and prices fall, then it may mean house B which was priced higher becomes worth buying. You could be gambling the £6.3k or £4.5k on the £310k house but if prices fell by 10% a £400k drops to £360k. To buy the £400k when you have £310k takes a £90k mortgage plus interest so might cost say £580k. If prices dropped 10% after say 2 years you may have lost £12.6k or £9k repression fee so your £310k drops to £297.4k or £301k but the £360k house is now more in reach. Needing £62.6k or £59k cash instead of £90k. Or a smaller mortgage which also saves mortgage interest so say doubles the saving to say £54.8k or £62k.

I think this is what some people on the forum have achieved. Missing out buying a smaller house and saving more to buy a larger one that was reduced.

Of course it's all still a gamble on house prices.

[R K]

I wanted to add some value to saving more money while you were renting in that each £1 off the purchase price also saves you the mortgage interest which might double it. That doesn't work if you are looking at a set £310k pot suffering from suppressed interest rates.

However.... what could happen is that if you keep your cash aside for house A at £310k and prices fall, then it may mean house B which was priced higher becomes worth buying. You could be gambling the £6.3k or £4.5k on the £310k house but if prices fell by 10% a £400k drops to £360k. To buy the £400k when you have £310k takes a £90k mortgage plus interest so might cost say £580k. If prices dropped 10% after say 2 years you may have lost £12.6k or £9k repression fee so your £310k drops to £297.4k or £301k but the £360k house is now more in reach. Needing £62.6k or £59k cash instead of £90k. Or a smaller mortgage which also saves mortgage interest so say doubles the saving to say £54.8k or £62k.

I think this is what some people on the forum have achieved. Missing out buying a smaller house and saving more to buy a larger one that was reduced.

Of course it's all still a gamble on house prices.

Sure, yep.

It doesn't change the numbers on the rent v buy on the £310k house above though and your example assumes you will rent a home below the value of the one you wish to buy (more or less. i.e. not comparable). Agree that's a strategy but it doesn't change the numbers.

I was attempting to differentiate between what people may do in their personal circumstances from the valuation of the asset itself. When you're looking at AAPL at $650 for instance you're looking at it independently from the personal lives, choices, and financial situation of AAPL shareholders (Not an exact comparison but you can see where I'm coming from I'm sure).

What caught my attention was how rental yields may be moving from <3% to, in this case, more or less 4%. It may be a one-off, but it's worth keeping an eye as it has historically been an early indicator of the start of the next cycle. Whether that seems plausible or not. We'll only know for certain with hindsight.

[Democorruptcy]

Sure, yep.

It doesn't change the numbers on the rent v buy on the £310k house above though and your example assumes you will rent a home below the value of the one you wish to buy (more or less. i.e. not comparable). Agree that's a strategy but it doesn't change the numbers.

I was attempting to differentiate between what people may do in their personal circumstances from the valuation of the asset itself. When you're looking at AAPL at $650 for instance you're looking at it independently from the personal lives, choices, and financial situation of AAPL shareholders (Not an exact comparison but you can see where I'm coming from I'm sure).

What caught my attention was how rental yields may be moving from <3% to, in this case, more or less 4%. It may be a one-off, but it's worth keeping an eye as it has historically been an early indicator of the start of the next cycle. Whether that seems plausible or not. We'll only know for certain with hindsight.

Renting a home below the value of what you wish to buy could be a plan so you can save more money via cheaper rent. Alternatively it could happen by accident, if because you are renting, it gives you time to find a bargain or distressed seller, that you wouldn't have found if you had already bought.

Yields could rise because prices fall.

I saw one recently for sale at £500k or to rent at £900 per month giving 2.16%

[Nomadd]

However.... what could happen is that if you keep your cash aside for house A at £310k and prices fall, then it may mean house B which was priced higher becomes worth buying. You could be gambling the £6.3k or £4.5k on the £310k house but if prices fell by 10% a £400k drops to £360k. To buy the £400k when you have £310k takes a £90k mortgage plus interest so might cost say £580k. If prices dropped 10% after say 2 years you may have lost £12.6k or £9k repression fee so your £310k drops to £297.4k or £301k but the £360k house is now more in reach. Needing £62.6k or £59k cash instead of £90k. Or a smaller mortgage which also saves mortgage interest so say doubles the saving to say £54.8k or £62k.

I think this is what some people on the forum have achieved. Missing out buying a smaller house and saving more to buy a larger one that was reduced.

Of course it's all still a gamble on house prices.

Exactly. And it's the much pricier stuff that's fallen/falling the most at the moment. Five years of 'holding fire' in my own case has brought a huge number of houses into my grasp.

Also, taking into account the more typical case for folks around here who don't have the £310k purchase price for the smaller place, but do have the £31k deposit...

Using the figures I mentioned from the Barclays mortgage calculator, you'd be sinking an immediate £31k into the property. A 10% fall in prices, and that's all gone. As discussed in previous NW threads, I know of several individuals in that scenario now. And prices are still sliding in many areas.

The mortgage payments would be double the rental costs. As discussed in previous threads, the amount of equity you would actually own in the property after 5 years of payments would be miniscule. So, that's £31k down, and 5 years worth of payments at double the rental value, so £108k spend. Add on top maintenance costs over 5 years and the initial purchase costs (stamp duty, etc.), say £12k, then your spend is £120k, for a home in which you own very little equity in at that point if house prices have fallen by just 10%. If they have fallen more - a highly likely outcome - then the loss could be much greater.

In comparison, the rent over that same 5 year period would have been £60k. So, that saving of £60k, plus the £31k deposit you didn't make, plus all the interest accumulated over 5 years on both figures, then you have a very sizable stash - ~£100k - to spend on a property which has declined 10-30% (?) in value over the period (in other words, upwards of half the price of the property if purchased 5 years later.) This very scenario was discussed several pages back, but it is worth emphasising once more, I feel.

As you said yesterday: it's a gamble on which way you believe prices are heading. As long as people take into account all costs and are aware that prices can swing in both directions, then there is no problem.

Edited September 28, 2012 by Nomadd

[19 year mortgage 8itch]

more or less 4%

Speaking of personal experience and the cheap (ha) side of the village, house I rented Mar '10 to Mar '11, summer '11 sale on the land registry was at a 3.6% yield. Typical yield on other houses on the road were nearer 4%

The OIEO £230k house I've posted on turned down a £750pm rent offer in Feb '11 (even after we knocked the 2yr term off) and did seem to rent, last asking price I think was £825 - 3.9% yield on our offer, presumably they got a year at more

First house I viewed in hale http://www.rightmove.co.uk/property-for-sale/property-31655014.html Was for rent at £975 back in Jan '10. Seems like its been for sale ever since I think my wife made a desperate offer at £800 or £850 as she (initially) didn't like the house I picked. Assuming it was 800 and £250k is fair value (been for sale for years) then that's a 3.8% yield they turned down.

And these are all what I would term compromised properties. So... I don't think 4% yield is surprising or unreasonable in the 2 bed, bottom of the rental market. Ironically, 2 YPs can easily afford a grand a month in rent. Got 2 *****-mobiled YPs moved in next to me last month. Trouble is later on when you want a bigger place and you're paying a grand a month for childcare and the 3 bed place you think you deserve is £500 more at £1500.

[howarden]

Can I ask what you think of this one?

http://www.rightmove...(Drawn%2520Area)%26radius%3D0.0%26searchLocation%3DUntitled%2520(Drawn%2520Area)%26searchType%3DSALE%26useLocationIdentifier%3Dfalse%26box%3D-2.35893%2C-2.32992%2C53.38988%2C53.40352%26popupPropertyId%3D37790762%26mapType%3DMap&fromMap=true

Is an offer of 215 good value. I know it says sold STC

It has the extension which gets rid of the biggest problem with these houses which is the tiny 3rd bedroom. Plenty of off-street parking and looks in reasonable decorative order. I'd definitely consider it at 180k, probably consider it at 190k, but much above that and I would ignore, which I did as I'm in the market for a house like that and it's in one of the areas I'd consider. But then again, I'm in no rush and looking for value rather than a specific house with a specific budget and plenty of people seem to be willing to pay more than I am.

[19 year mortgage 8itch]

It has the extension which gets rid of the biggest problem with these houses which is the tiny 3rd bedroom. Plenty of off-street parking and looks in reasonable decorative order. I'd definitely consider it at 180k, probably consider it at 190k, but much above that and I would ignore, which I did as I'm in the market for a house like that and it's in one of the areas I'd consider. But then again, I'm in no rush and looking for value rather than a specific house with a specific budget and plenty of people seem to be willing to pay more than I am.

Sorry united4ever missed that first post but I'd agree with howarden's assessment. I personally would want a little more than that off the price too.

[Venger]

What caught my attention was how rental yields may be moving from <3% to, in this case, more or less 4%. It may be a one-off, but it's worth keeping an eye as it has historically been an early indicator of the start of the next cycle. Whether that seems plausible or not. We'll only know for certain with hindsight.

That's the second time in the last few weeks you've inferred that as a possibility. Looking for hints suggesting of the beginning of the next cycle. The cycle is over as you've known it from the past 50 years. It's not a constant formula.

I'll see you on the end of a house price crash in Hale.

I've said it before, that yield nonsense can quickly change. It's not a stable measure any more. It can't be relied upon other that for the very short-term. We'll see about this yield when homeowners begin having to sell for a lot less, when the last of the buyers at high prices have all be sucked in, bringing about lower asking prices. And landlords themselves see capital value falls, and their overleveraged circumstances come back to bite them.

[Venger]

Yields could rise because prices fall.

Yields can fall when house prices fall, with rising unemployment and pay cuts.

[Venger]

I am surprised by how many seem to have 'thrown in the towel' and purchased on the main forum, especially those who have paid £500k+ for a small house/flat in the SE/London. It seems to be just about the wrong time to do it, IMHO. I've a feeling that that 'second bubble' blowing off you mention is just around the corner (in fact, in the NW, it's the larger detached houses that have already seen the steepest declines - and that doesn't seem to be abating by the amount of 'sticking' property I'm seeing.)

As ever, we pays our money and makes our choice. Or not.

Second bubble popping just around the corner. Fully agree. I'm expecting a few sudden jolts, not the tranquilly some expect because of continued QE and EU debt buying.

Markets can turn, and when they do, they often do it rapidly and sharply. It's funny how people can easily accept 10%+ HPI a year in the boom, but not expect the same or more coming down in the bust.

I'm seeing suggestive glimpses of it. Nothing to do with number of properties. Doccyboy has already clarified there wasn't a massive building boom in Northern Ireland (UK) but which has still seen the start of a crash. Same in Toyko in 1990. Wasn't because there were too many apartments and houses the real estate market fell a conservative $3 Trillion in value. It's to do with prices being far too high for market conditions.

It doesn't surprise me about those who have "thrown in the towel" and purchased. A market can't crash until almost all of those who can conceivably be drawn in has become a buyer. We'll see what happens when there are very few such new entrants and upsizers left in the market. Their numbers have already been whittled down. Those who have bought at high prices, have now bought. They're the stockholders, no longer buyers.

With the exception of BTLers but which has similarly drawn in many people who've reinvested their HPI gains on margin. The number of happy BTL buyers has fallen, dried up considerably, and can come to a sudden stop. A good contact of mine is a busy solicitor who acts on behalf of for landlords, in matters such as getting possession, which sometimes complicated. And arrears hard to recover. It's not a happy paradise for all landlords out there, and I see many more of them encountering problems in the near future.

[Nomadd]

Second bubble popping just around the corner. Fully agree. I'm expecting a few sudden jolts, not the tranquilly some expect because of continued QE and EU debt buying.

Markets can turn, and when they do, they often do it rapidly and sharply. It's funny how people can easily accept 10%+ HPI a year in the boom, but not expect the same or more coming down in the bust.

I'm seeing suggestive glimpses of it. Nothing to do with number of properties. Doccyboy has already clarified there wasn't a massive building boom in Northern Ireland (UK) but which has still seen the start of a crash. Same in Toyko in 1990. Wasn't because there were too many apartments and houses the real estate market fell a conservative $3 Trillion in value. It's to do with prices being far too high for market conditions.

It doesn't surprise me about those who have "thrown in the towel" and purchased. A market can't crash until almost all of those who can conceivably be drawn in has become a buyer. We'll see what happens when there are very few such new entrants and upsizers left in the market. Their numbers have already been whittled down. Those who have bought at high prices, have now bought. They're the stockholders, no longer buyers.

With the exception of BTLers but which has similarly drawn in many people who've reinvested their HPI gains on margin. The number of happy BTL buyers has fallen, dried up considerably, and can come to a sudden stop. A good contact of mine is a busy solicitor who acts on behalf of for landlords, in matters such as getting possession, which sometimes complicated. And arrears hard to recover. It's not a happy paradise for all landlords out there, and I see many more of them encountering problems in the near future.

Yep, completely agree.

The UK is certainly not a picture of sunshine and roses (from the front page of HPC): http://www.guardian.co.uk/business/2012/sep/28/fitch-warns-uk-of-downgrade-from-aaa-rating

[19 year mortgage 8itch]

On a lighter note, anyone care to recommend a pub for dinner tomorrow. Us and 2 very young kids, late afternoon.

Looking for somewhere new but have previously been to, Rope & Anchor (nice but pricey and always rammed), the griffin (never again), swan with 2 nicks (deeply unimpressed), axe & cleaver/romper inn (really?)

Anyone know the Smoker Inn in Plumley? We like that although only go every year or so.

Is it worth trying somewhere like the Vic in Alty? Or what about any along the route to Wilmslow?

[needle]

On a lighter note, anyone care to recommend a pub for dinner tomorrow. Us and 2 very young kids, late afternoon.

Looking for somewhere new but have previously been to, Rope & Anchor (nice but pricey and always rammed), the griffin (never again), swan with 2 nicks (deeply unimpressed), axe & cleaver/romper inn (really?)

Anyone know the Smoker Inn in Plumley? We like that although only go every year or so.

Is it worth trying somewhere like the Vic in Alty? Or what about any along the route to Wilmslow?

Whenever I have the kids, its Frankie and Bennys

Avoid Francs in Alty, its bloody awful.

Theres that new Thai place I havent tried yet on Regent Street.

You could try that and let us know what its like!

[19 year mortgage 8itch]

Whenever I have the kids, its Frankie and Bennys

Avoid Francs in Alty, its bloody awful.

Theres that new Thai place I havent tried yet on Regent Street.

You could try that and let us know what its like!

Wanted to try a new pub. Not particularly fond of thai although had a thai takeaway tonight

I've been to Coco's on Regent St a few times for lunch on a Saturday and been very happy fwiw

[needle]

Meant to put this up for the last while - http://www.rightmove.co.uk/property-for-sale/property-33717502.html

Read the description and weep giggle.

A remarkable opportunity to acquire one of the finest homes in Hale at an extremely competitive price. Woodcroft was valued at over £5m at the peak of the housing market in 2007. It first came to the market at what all agents considered to be a very realistic £3.75m in 2010. The house was withdrawn from the market because of the inactivity in the market and the vendors postponed their move. In Spring 2012, we were instructed to remarket the property at what we believed to be a very realistic price of just under £3m. Having failed to attract a buyer by mid August 2012, the vendors have decided to adopt an extremely innovative way of marketing by inviting best offers over £2m by 31/10/2012. The sale of Woodcroft is by no means a 'fire sale'; however, getting on with their life is more important to the owners than waiting for a premium price. As they purchased the property over 15 years ago, when house prices were generally much lower, the price achieved today doesn't really matter so long as they can be satisfied they have achieved the best price possible in today's market. By any measure, this has to represent exceptional value; this could be an opportunity to buy what we genuinely believe to be one of the finest homes in Hale, on one of the best roads, in one of the largest gardens currently available. Only once in 30 years has Woodcroft come to the market. The current owners have maintained and improved the house in complete sympathy with its original features. The pressures to carve up the land and hive off a building plot in the heady days of the last decade were resisted, making this a truly rare opportunity to acquire a substantial home in large, very private grounds of just over an acre. Please refer to the separate addendum with these sales particulars for guidance on the offer submission process.

[19 year mortgage 8itch]

That is a classic - any idea how much they paid for it 15 years ago?

http://www.zoopla.co.uk/house-prices/greater-manchester/hale/broad-lane/

1997 sale prices between 250 & 450k, I'll try find out what number it is.

But, mapping it out, it looks more like number 18 which sold for 660 in 1998

Nice house

Edited September 30, 2012 by SeeYouNextTuesday

[Nomadd]

Meant to put this up for the last while - http://www.rightmove.co.uk/property-for-sale/property-33717502.html

Read the description and weep giggle.

Some priceless (no pun intended!) text there by the EA . Almost worth printing off and sticking on the wall. Or maybe printing off a taking with me every time I speak to an EA from now on.

I think we can finally put the 'old money' argument that was said to sustain Hale house prices to bed. As doccyboy and Venger pointed out - you can't fight market forces forever.

EDIT: Mind you, still vastly overpriced, IMHO. In a sane market, I'd say £1.25M tops. Not sure what others think?

Edited September 30, 2012 by Nomadd

[Venger]

Meant to put this up for the last while - http://www.rightmove...y-33717502.html

Read the description and weep giggle.

That's a real highlight for my day. Thanks.

At least the owners are taking the necessary steps to get it sold. Maybe, for I can see sellers of such houses reducing to below £2m at some point .

Perhaps if they'd asked for offers over that level in late 2010 it might have sold. Instead they sulked and took it off the market for quite some time. The peak value they refer to looks exaggerated to me, and enough market forces in play to see such houses come down way below their current £2 million pound asking price mark.

I don't know if the owners are responsible for the description or whether the EA has to take all the blame. Harking back to when some buyer bought a similar house in the area for £5m and thus immediately accepting their home must had risen to the approximately the same value. Values are changeable. Values are not money in your hands or your bank accounts. At least the listing makes that very point, perhaps unintentionally. Those sat on the housing stock will gradually learn this.

One of their near neighbours on the same road might not appreciate the new selling tactic, wanting and hoping for someone to come along and present them with £2.8 million for what appears to be a fairly comparable home. Relying on solidarity and holding the market to hostage? No. Others in the market can put their homes on for lower prices if they've plenty of equity, and the market shows no interest at higher asking prices. http://www.rightmove.co.uk/property-for-sale/property-34444235.html

[Nomadd]

One of their near neighbours on the same road might not appreciate the new selling tactic, wanting and hoping for someone to come along and present them with £2.8 million for what appears to be a fairly comparable home. Relying on solidarity and holding the market to hostage? No. Others in the market can put their homes on for lower prices if they've plenty of equity, and the market shows no interest at higher asking prices. http://www.rightmove.co.uk/property-for-sale/property-34444235.html

Quite. Always interesting to see the neighbourly game of follow-my-leader in a crash:

Do you go for death-by-a-thousand-cuts: http://www.home.co.uk/search/price_info.htm?property=1705809115

Or off-with-their-heads: http://www.home.co.uk/search/price_info.htm?property=2910747662

Whatever the approach, it presents a nice set of graphs for prospective purchasers to consider.

[Venger]

More off with their heads, Nomadd. It's quicker for everyone rather than dragging it out. Just need market forces overcome the QE and help increase supply, or/and make sellers become ever more realistic with their asking prices. Not allow them to hold out with super low SVRs and mortgage rescues. Looks like it's the older sellers with lots of equity who may lead the way, and less so on the highly leveraged, but who will still play a part.

My theory is as prices grind down lower, as they have been gradually doing, more owners will become uncomfortable, and more will become actively looking to sell.

Many owners carry a lowest value point in their minds of what their homes are worth. I've done it with shares; comfortable with seeing them fall, but when they threaten my mental stop-loss, urgently feel the need to sell before they fall further still. That effect could be amplified when the values of asset involved is worth (currently) many times more than an average shareholding. Then we'll see more of a panic, rush to market, further cutting of asking prices and more willingness to accept lower offers from sellers who want to be amongst those who get out with higher levels of value, as prices keep sliding.

Meant to put this up for the last while - http://www.rightmove...y-33717502.html

Read the description and weep giggle.

There's a few inconsistencies in the listing too, or blurring of truths in their description. I'm thinking that line they're using.. 'purchased the property over 15 years when house prices were generally much lower' could actually be as much as the current owners purchasing it 30 years ago when they were much lower still?

They want to project the property as an exclusive rare opportunity, 'only once in 30 years has Woodcroft come to the market', but it's actually come on a few times, at prices the market showed no proceed-able interest in. Still a very encouraging (from the HPC perspective) listing. Very amusing.

As they purchased the property over 15 years ago, when house prices were generally much lower.... Only once in 30 years has Woodcroft come to the market.... It first came to the market at what all agents considered to be a very realistic £3.75m in 2010. The house was withdrawn from the market because of the inactivity in the market and the vendors postponed their move. In Spring 2012, we were instructed to remarket the property at what we believed to be a very realistic price of just under £3m. Having failed to attract a buyer by mid August 2012, the vendors have decided to adopt an extremely innovative way of marketing by inviting best offers over £2m by 31/10/2012.

[Venger]

The interior of the house is a bit of mix. I'd say the sellers are in their mid 50s. They've got a mix of contemporary furnishing, with flat screen tv on wall, downlights. Whilst other rooms still quite tastefully done appropriately with the theme of an Edwardian villa house.

They want you to know they resisted the 'pressure' (temptation more like it) to hive off some land for another housing plot. I wonder if that is really do-able on that site.

[Nomadd]

I agree with you. More supply needed. Funny that in these 'hard times' no one is wanting to sell their house!

But there is the rub. I know of a few people in the NW who bought in 2007 at the sub-£200k of the market . Some of them want to move, but realise that they'd have to take a hit. At the moment, that's too much for them to stomach (physiological, rather than rational financial thinking) and so have decided to stay put. The mortgage payments - thanks to QE's - are manageable, so there is no panic to sell. They will just carry on like this for a few more years, irrespective of whether prices drop further. They simply don't have the finances to trade-up, and job worries, cost-of-living worries, etc., make staying put the easiest option.

And that leaves us with whom? Well, as Venger pointed out, there are those that bought so long ago that they can afford to drop. The chain that I mentioned one of my family members was in recently in South Manchester was all made up of folks who had owned for 15 years+. To them, a 20-25% drop still left them with a healthy profit. So no worries. Of course, as we've discussed, it's the sales figures of these recently sold properties turning up on the various registries that 'set the standard' for future house prices. Those lower prices may cause some of those mentioned in my first paragraph to stay put even longer - once they realise the true hit they'd have to take. And who else will sell? Well, I guess 'second home' owners - BTL'ers who realise the streets - or rather houses - aren't paved with gold; those who inherit a property due to a death in the family; and those going through a divorce (in fact, one of these was in the chain I mentioned above.)

So, all-in-all, I think we'll see some supply improvements - especially on the larger, older properties, as they tend to be owned by older folks who will still walk away with a profit - but not a flood, IMHO. I maybe wrong, but so far, the cheaper end of the market hasn't shown much in the way of drops or supply. Who knows, maybe that's a temporary phenomena, but I have my doubts. With low IR's, there just isn't the pressure for people to sell at present.

I almost sound 'bullish' with the above comments! Of course, I'm not, I'm actually uber-bearish when it comes to property. It's just that I think the falls across the market - rather than just the £500k+ bracket, will take much more time to materialise fully. Yes, there will be properties coming to the market all the time, but just not in huge numbers.

As ever, happy to accept any other opinions on this.

[Venger]

it's the sales figures of these recently sold properties turning up on the various registries that 'set the standard' for future house prices. Those lower prices may cause some of those mentioned in my first paragraph to stay put even longer - once they realise the true hit they'd have to take.

There will be some owners who were looking to sell who do that; withdraw their homes from the market and stay put.

Look at that Edwardian Villa. The owners did that. hey withdrew their home from the market when there was no proceed-able buyer interest in their home at the original asking price back in 2010. Ever since other sellers in the area at that level and above, have been transacting at lower prices, or reducing their asking price (even for the new build modern houses that RK says were vastly over-priced), have impinged on their home's value.

Now their Edwardian Villa is back to the market, trying to sell, prepared to try alternative selling method, and certainly not going to achieve the price they once hoped they would. Their stubbornness to ask and hold out for too high a price didn't stop the market from playing out without their home on the market. Now it's worse, for them.

And now stamp duty having risen substantially for property transactions over £2m during the time they took their property off the market. They now want to 'get on with their life' and have partially accepted that withdrawing their home off the market only put them in a position where they now can't sell it for as much, as perhaps they could of if pricing competitively back in 2010. .

At that level of the market too you've got a fall away in people prepared to upsize to such homes. Why risk it if you're financially secure in a reasonably nice house slightly further down in the market. There is less aspiration for such moves when the risks are evidently so much greater than only boom times. Then millions of other market variables in the wider economy which are negative for house prices. I see owners of the higher end homes where capital values rose the most during the last 30 years having to cut the most, in terms of money, in order to sell..

At all the lower ends of the market, falling prices will cause some sellers to withdraw from the market, but also shake out other owners into selling. And it's those active sellers in the market, who continue to reduce asking prices or accept lower offers, who decide matters of wider value, even for those who took their homes off the market. You already know that. We just need some jolt to the market. A little push of some sort.

Others who withdrew their homes from the market will definitely come back, in a good way, when they realise they can still sell for lower than they originally had in mind, but save fortunes on trading up to a nicer home, because such homes have fallen in value even more. Making them more affordable. Yet that also depends on them feeling financially secure to do so. It's a bit of an impasse coming up, for some owners will definitely prefer to 'make-do' than trade up. Fewer sales higher up, but certainly putting the market more at risk of value destroying explosions, when one seller accepts a substantially lower price in a weakly traded market, prices cascading downwards. I feel that's to come. It's lurking right behind the veil of tranquillity.

Where do the buyers you know who bought in 2007 at the sub £200K price range want to move to (even if they're holding out for the moment because can't stomach accepting lower prices) ? If so I'm not concerned about them at all. If they amongst those who've overpaid and in tricky financial positions, it won't stop new supply coming on, at lower prices, from those who realise they can sell for less and get much better value trading up.

You may have a different perspective on supply because your financial position is superior (I've no issues with that whatsoever) to those of us looking more towards the entry level in nicer areas. You can open Rightmove and see lots of properties you're in a position to buy if you wanted to, although I realise you do have specific demands in the type of home you're looking for. It's just a bit frustrating for those seeking to buy at the lower end of good areas for supply, in my opinion.

Financial Values Can Disappear

Asset prices rise not because of "buying" per se, because indeed for every buyer, there is a seller. They rise because those transacting agree that their prices should be higher. All that everyone else - including those who own some of that asset and those who do not - need do is nothing. Conversely, for prices of assets to fall, it takes only one seller and one buyer who agree that the former value of an asset was too high. If no other bids are competing with that buyer's, then the value of the asset falls, and it falls for everyone who owns it. If a million other people own it, then their net worth goes down even though they did nothing. Two investors made it happen by transacting, and the rest of the investors made it happen by choosing not to disagree with their price. Financial values can disappear through a decrease in prices for any type of investment asset, including bonds, stocks and land.

Anyone who watches the stock or commodity markets closely has seen this phenomenon on a small scale many times. Whenever a market "gaps" up or down on an opening, it simply registers a new value on the first trade, which can be conducted by as few as two people. It did not take everyone's action to make it happen, just most people's inaction on the other side. In financial market "explosions" and panics, there are prices at which assets do not trade at all as they cascade from one trade to the next in great leaps.

At the peak of a credit expansion or a bull market, assets have been valued upward, and all participants are wealthy - both the people who sold the assets and the people who hold the assets. The latter group is far larger than the former, because the total supply of money has been relatively stable while the total value of financial assets has ballooned. When the market turns down, the dynamic goes into reverse. Only a very few owners of a collapsing financial asset trade it for money at 90 percent of peak value. Some others may get out at 80 percent, 50 percent or 30 percent of peak value. In each case, sellers are simply transforming the remaining future value losses to someone else. In a bear market, the vast, vast majority does nothing and gets stuck holding assets with low or non-existent valuations.

[Venger]

I agree with you. More supply needed. Funny that in these 'hard times' no one is wanting to sell their house!

Hah. There's been wildly differing opinions about the supply levels recently. Glad to know I'm not the only one who thinks supply is not as good as it could be, or should be except for government intervention on behalf of owners.

I don't normally use Moneyweek as a source, but found this 2011 article when googling for info about supply. I've referred to it before, but didn't quote any of it.

But the really interesting number in this survey is the top reason for sales falling through: the seller withdraws his property from the market. This is up by four percentage points since 2009 and comes down to the fact that (thanks in part to the demise of expensive 'home information packs') would-be sellers are now able to test the market for free.

Yes they can test the market without requiring a HIP now, but why go to all that trouble of putting your home on the market.

An owner could just get a valuation couldn't they? Or make an educated guess yourself from what nearby homes recently sold for. I bet increasing amounts of traffic to house price websites are from owners monitoring just that.

My bet is these owners who were looking to sell have not been satisfied with the lower than peak offers being put forward to them, and withdraw. Similar to the Edwardian Villa owner, but at lower levels of the market too.

Yes some will not return to market. Others surely will, and forced to accept new realities such as the Edwardian Villa owner. Others more will realise the lower asking prices on their own home matters not as much, when the homes they were looking at trading up are available for at much lower prices than before. Need that small jolt. I doubt it requires too much. It's weakening from other directions anyway. Tax receipts way down on what was expected. It's got to all feedback onto the housing market eventually.

I'd like to imagine there is a large pool of potential supply building up, which will eventually hit the market, as conditions draw out more sellers into reality. Supply that overwhelms the more stubborn owners or those who've come to terms with staying where they currently live and decide not to return to market to try and sell (fine, their choice). Supply especially supply from equity rich downsizers at the higher ends of the market, who can afford to cut more easily than those with big mortgages. Such equity rich deciding matters for those owners with lower asking prices.

http://www.moneyweek.com/blog/there-are-fewer-homes-for-sale-in-britain-than-you-think-12901