Has Anything *really* Changed?

[DaveyDave]

Hi All,

Back in 2005 I was in the market for a property. I viewed a few - even found a few that I second-viewed, but they always sold before I could ever get my foot in the door. The market was mad. I decided to continue renting (and saving).

So fast forward to 2012. Inflation is high and I don't like having large amounts of cash sitting in accounts with terrible interest offerings. So I make the decision to look at the market again. So what do I find?. I was thinking that my saving would put me in a good position. Well, here in the SE, it appears that prices are still roughly at 2007 prices, with possible exception of flats, but I'm not interested in those. Despite, increased inflation, rising unemployment and reduced credit availability, things are just as bad in the market as they were in 2005. Demand is high and activity is brisk. Last week, a local property came on the market at 10.00am Saturday morning, I had the EA call at 11.00. By 2.00pm the same day it was sold!. Of the two properties I have pursued recently, the EA refused me a 2nd viewing on the first after a rival offer had been made, saying that they could not wait the 2 days required for me to become available. I made a good 'cash', no-chain offer on a second property which I believe correctly valued the property but was immediately outbid. I guess there are people out there willing to pay above the market rate.

So, 7 years pass and no change. I really don't understand where the money is coming from to buy these properties. I had always thought that it was credit availability that controlled house prices, but clearly this cannot be true. People still seem to be able to find the money. Whether they inherit it or just have the equity in their existing property I don't know. Either way, it's damn frustrating.

Dave

[Bland Unsight]

Demand is high and activity is brisk.

Do the Rightmove graphs of the Land Registry data corroborate that? Transaction volumes way down round here, (also South East).

It's all just out there waiting.

[Trampa501]

What has changed is there are lots of places that have now had price corrections - Spain, the US, the republic of Ireland, northern Ireland, even parts of northern England and the east Midlands...

You may have (genuine) objections to buying a property in those places, but at least the choice is now there, and getting bigger as time goes on.

[okaycuckoo]

I really don't understand where the money is coming from to buy these properties. I had always thought that it was credit availability that controlled house prices, but clearly this cannot be true. People still seem to be able to find the money. Whether they inherit it or just have the equity in their existing property I don't know. Either way, it's damn frustrating.

Dave

May be foreign buyers tapping their local credit bubbles. I've read some stuff about Chinese investors, even turning their guns on the northern housing market because it's better value for money.

Domestic gubmint could price them out - but hey, it's a global market.

[sims]

Do the Rightmove graphs of the Land Registry data corroborate that? Transaction volumes way down round here, (also South East).

It's all just out there waiting.

Transaction volumes are way down. But at the same time, the number of properties available for sale is also way down, so the competition for each individual property is about the same..

[cybernoid]

What has changed is there are lots of places that have now had price corrections - Spain, the US, the republic of Ireland, northern Ireland, even parts of northern England and the east Midlands...

True enough, if you were waiting for a decent crash and were looking to buy in the US or Spain you did the right thing by renting for these last few years and saved yourself a fortune. You can buy now in these places and get something for your money.

Im sick of waiting for it here, and getting out is looking sensible... I could pretend it was the plan all along!

The UK government really don't want us here, im seriously looking into it.

[24gray24]

You are quite correct. No crash has happened in London commuter belt yet.

But it will, folks, it will.

Because: 1. the banks are still insolvent. 2. People can't afford those mortgages unless their wages go up and 3. Wages are going down, not up.

All that hogwash about the chinese...why would they? Would you move to England from Hong Kong if you were Chinese?

People can hang on, demanding 2007 prices, until interest rates go up. Then they lose their shirts.

[singlemalt]

There's still plenty of money out there especially for property in the SE. Just not enough money to stop the whole thing crashing and unless things change in a pretty short space of time the social discontent that were the London riots of 2011 will look like an entrée.

People need a stake in society (family, job, house) or society crumbles.

[cartimandua51]

People need a stake in society (family, job, house) or society crumbles.

True, but we're not talking Mad Max here. Wind back 150 years and only 10% of the population owned houses, job security (and security of tenure of rentals) was non-existent and the chances of having both parents still living by the time you were 25 not much better than evens. Yes, there was a LOT of crime (see Dickens writings - fiction, but based on social observations ) and the Powers that Be were worried stiff about anarchy but all that happened was a lot of misery for the poor. And this era is the height of the Victorian obsession with the family and religion.

What goes round comes round. I personally wouldn't be at all surprised by a resurgence of fundamentalist religion akin to the difference between the laid-back attitude of the Georgians compared with the fanaticism of the Victorians. You've only got got to compare the writings of Jane Austen and Charlotte Bronte - only thirty years separate them but they are world apart in attitudes.

[porca misèria]

True, but we're not talking Mad Max here. Wind back 150 years and only 10% of the population owned houses, job security (and security of tenure of rentals) was non-existent and the chances of having both parents still living by the time you were 25 not much better than evens. Yes, there was a LOT of crime (see Dickens writings - fiction, but based on social observations ) and the Powers that Be were worried stiff about anarchy but all that happened was a lot of misery for the poor. And this era is the height of the Victorian obsession with the family and religion.

Isn't that in significant part a revisionist view of history, arising from feminism's need to tell us how oppressed women were?

What goes round comes round. I personally wouldn't be at all surprised by a resurgence of fundamentalist religion akin to the difference between the laid-back attitude of the Georgians compared with the fanaticism of the Victorians.

The regular stereotype is there, but the Victorians sent up their religion in irreverent ways we'd get prosecuted for in our times, oppressed by the shadow of Blair.

You've only got got to compare the writings of Jane Austen and Charlotte Bronte - only thirty years separate them but they are world apart in attitudes.

Thirty years, but much more important is the difference between rich-and-fashionable and the much poorer northerner.

[Son of Taeper]

Back in 2006 I wanted to buy a property - but I was always gazumped because the banks were lending crazy money to anyone with a pulse.

Now its 2012 and a lot of that property is 50% cheaper and the "clever" ones who bought at the top are gradually getting re-possessed.

It's all about regional variations. Just because a local property sells in 200 minutes doesn't mean to say the whole market is like that.

So one can't extrapolate an entire market from one's own regional experience.

Mmm,

Any stats on that period please.

- the 50% decrease

- repo

Keep it down to one postcode or general area, first 3 letters of the postcode should suffice.

[Son of Taeper]

There's still plenty of money out there especially for property in the SE. Just not enough money to stop the whole thing crashing and unless things change in a pretty short space of time the social discontent that were the London riots of 2011 will look like an entrée.

People need a stake in society (family, job, house) or society crumbles.

You cannot have it all.

I'm sure you have something I want as well so are you saying it;s ok if I loot it from you?

It's only fair under your rules that I steal any cash you have right?

[Scary Bear]

In the area where I live and work (Fife/Edinburgh) i'm still waiting for house prices to 'crash'. It just isn't happening. Granted the house prices have fallen from the peak prices in 2007, but not as much as I expected. We're probably at the same level of prices from circa 2005/2006. However, as inflation has caused all fuel prices to rise, and food prices to rise, the price of these houses is even more unaffordable.