Saturday, Sep 22, 2007
Warning! Prices may come down!
FT: Bricks and Mortar not so solid a defence for harried investors
The recent turbulence in the credit markets is expected to put further pressure on the property market as banks become more cautious about who they are lending to and borrowing rates rise.
Posted by auntie @ 09:51 AM (734 views) Add Comment
12 Comments
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1. uncle chris said...
There is no two ways about it - prices are coming down - I call that the crash is underway (you can hold me to that David) and we are following the USA. Judging by the email from propertysnake a few days ago, those with a bit of sense (or desperate) are trying to get out while they can - see link below:
http://www.propertysnake.co.uk/site/detail/4962283
which relates to this property
http://www.rightmove.co.uk/viewdetails-15334777.rsp?pa_n=1&tr_t=buy
Still expensive, but when you realise that they bought this for £300,000 around 2 years (I was monitoring it) and subsequently renovated it, you realise they must be making a big loss after expenses, fees etc.
2. (cr) Ash said...
Good find uncle chris! There's also the opportunity cost to add on to that loss - if they'd had the same £300k sat in the bank at 5% interest for the same 2 years they'd have made roughly £30k in interest alone!
Safe as houses!
3. su said...
Wow, Uncle Chris. Can't argue with that!
I haven't been on Propertysnake for a few weeks. What a difference now! Loads more properties and some pretty hefty reductions. Good to see some photos & links to properties, but unfortunately some of the info is a bit inaccurate - houses labelled as flats!
4. enuii said...
Typical lifestyle property in the middle of nowhere with a long journey to lucrative employment, these are the sort of properties that will suffer heavily as people feel the financial pinch.
5. talking rot said...
Uncle Chris
Great post. Thanks.
Has anyone except me checked the location? It is in the middle of no where. Who wants to drive for half an hour to visit the shops or to take the kids to see their closest friends? OK for an couple without kids though. I wonder if this is a farmer selling on an old farm house, hence the paltry 4-acres that is only suitable for a city type wanting to have a go at hobby farming (I can't imagine you could run even an organic vegetable business on a plot that size; can it really be large enough to run as a going farming concern?)
Good to see the price coming down though.
6. dohousescrashinthewoods said...
Just had a scan of the site and the top property is down 40%, seems to be a village in the Reading area. The rest of the front page is all 30%+
I'm sure that's more than it used to be
7. dohousescrashinthewoods said...
One house round here is down 100k at a stroke: http://www.propertysnake.co.uk/site/detail/4622185
8. Littledeb said...
FT: 'Bricks and Mortar not so solid a defence for harried investors'..... no sh*t sherlock!!!
More properties showing on propertysnake in my area too. Was down to a grand total of two about a month ago. Reductions are small but they are there. I have been following a local EA's website for months, tracking certain properties for the length of time they hang around and the prices that they are asking (yes, I clearly need to get out more!). A great many are now being reduced (having been up for sale for well over 6 months). Just when I was starting to lose faith.
9. Yes said...
And it seems that all the properties have dropped in price over the last week, heres one in my neck of the woods
http://www.propertysnake.co.uk/site/detail/6800068
10. david20040_0 said...
Uncle Chris, I do hope that you will be right.
Unfortunately I think you will be proven to be wrong.
I do believe that the Government and the BoE's decision to bail out NR will have wide ranging consequences of the banks continuing to take excessive risks.
I believe that Abbey / Banco Santander offering 125% at 6* salary shows this.
11. uncle chris said...
If you actually look at the vague statements of all concerned, the government/BoE/FSA haven't actually put in place any mechanisms that would guarantee the money of investors. So far we have had alot of words (the usual new liebour trick), obviously designed to soothe savers/investors, with hints that things will be looked at, but they will get back to us on the details. I guess they are hoping that the panic of the past weeks will soon blow over and they can get through the October/November election - to be announced within two weeks - before the poop really hits the fan.
12. david20040_0 said...
It has been in the news today that Darling is putting in a process to protect the first 100k.
With that amount of protection the banks can go nuts and lend like crazy and even if they screw up they and their customers are safe.
Look at Abbey with their 125%, 6* salary mortgage.