Friday, May 08, 2009
The EAs say there are
BBC: Signs of life in the housing market.
Of the 20 agents, 17 reported an increase in sales, comparing the first quarter of 2009 with the last three months of 2008.
Posted by peter_2008 @ 10:38 AM (1251 views) Add Comment
13 Comments
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1. str 2007 said...
Comparing the last three months of any year with the first 3 months of the following should bring the same results.
However from the article
''We're selling 25, 28 properties a month again. Last year we struggled to get into double figures.
"We're really rolling again now, even better than before the recession."
Taking an average sale at 200k x 1.5% commission x 25 per month = £75k per month. That's a nice little business.
As I've said previously, I just don't think we've seen enough bad news to put off home buyers.
Also it seems the banks are lending. If they weren't then you'd see all the sales falling through due to down valuations and save for the odd 1 or 2 I'm not seeing them coming back to market once sold.
2. matt_the_hat said...
Mortgage - The origins of the word mortgage come from the ancient French words mort (death), and gage (a pledge). However, taking out a mortgage did not mean that the mortgagee expected to die if he did not pay back the mortgage; it merely meant that his entitlement to the mortgaged property would cease if he fell behind on his payments.
Slavery - the state or condition of being held in involuntary servitude as the property of somebody else.
Negative equity = Mortgage (+) Slave
3. mander said...
The banks have been told to lend otherwise they would not. The banks know that every ten years they will need a major bail out from the population.
Is UK going to be the first to show the rest of the world how good are they at keeping house prices high? Or maybe Dubai? I gues in Dubai there is no shortage and the quality of the property does not really matter here.
4. Maihem said...
LR says that prices are down comparing the same two quarters. The market is alive but products are cheaper, that means retailers are getting used to the idea of falling prices and just want to sell their stock and move on. Quite normal retail, even if, unusually, most retailers are selling second hand and refurbished units.
5. drewster said...
A few points:
- There are fewer estate agents this year; so the number of transactions per agent will have increased, ceteris paribus.
- There might be more sales, but at lower prices. I'd be happy with that.
- One swallow doesn't make a summer.
6. pelethar said...
The level of transactions will grow all year - they bottomed out last year and simply couldn't go any lower. And as prices drop, more people will enter (or re-enter) the market. The relevant point is that the number of transactions (or enquiries, mortgage approvals, whatever) needs to approximately double or maybe treble to get back to a level which might sustain price increases.
I think a lot of these stories were conceived a few weeks back, when there was a bit of a groundswell of opinion amongst under-informed bulls that the HPC was over. The Halifax and Land Registry surveys of the last few days have buried that idea pretty comprehensively.
7. peter_2008 said...
I found it amusing that the EAs are spinning the Land Registry figures and trying to convince people why EAs words are more CREDIBLE than all indices including the official one.
The fact is that the EAs are probably the ones that are actually “behind the curve”. The increase in sale is just reflecting yester-month’s data, more specifically - the increase in NatHali index, when a dead cat bounce indeed happened between Feb and March. That plus the old-fashioned over-the-top optimism, chronic lying habits, genetically short sighted and sheer stupidity.
8. uncle tom said...
Consider this:
Since the turn of the millennium, the people entering the property market have been the higher earners, as lower earners were priced out. as prices rose higher, high earning young people were mortgaging themselves to the hilt to get a rabbit hutch, and many smaller properties were bought by speculators.
Even now, the people buying are impatient high earners, not low earners.
Falling prices are now trapping these high earners in small properties, as they go into low or negative equity. If you take the sum total of all mortgage advances since 2000 and compare them with the sum value of all the property they are secured on, you arrive at a mean negative equity of around 5%. So this entrapment is already wholesale.
In other words, half a generation of high earners who should have aspirations to move up to larger properties, now have no prospect of being able to do so.
The nett result is that while smaller properties have to fall in value until people can genuinely afford them, and there will always be a few uber-rich who can afford the biggest places; the outlook for properties that peaked in the £250k - £750k bracket is utterly appalling (for those seeking to sell).
The next generation of home-buyers will ultimately leap frog the present one, securing large homes for very low prices.
A new prediction from me:
In the coming years, we will see many larger properties sub-divided into multiple dwellings.
9. str 2007 said...
Uncle Tom
Your statement
(Falling prices are now trapping these high earners in small properties, as they go into low or negative equity. If you take the sum total of all mortgage advances since 2000 and compare them with the sum value of all the property they are secured on, you arrive at a mean negative equity of around 5%. So this entrapment is already wholesale)
I can understand your figures if only 100% mortgages were taken out since 2000 with no repayment vehicles atall. But only FTB's have small deposits. Unitil 2006/7 BTLers had to put down 25% and I understand ave. LTV was 66%.
Also don't forget alot of people actually have a repayment mortgage.
I accept the higher earners are in smaller houses than their respected parents on average (and now both are often working) so agree on the big loose out there.
I'd say the vast majority of £500k houses have 50% equity in them (on the basis the vast majority were purchased pre 2000 for £200-£250k.
Given the deposits that would have likley been put down with these houses plus 9+ years of repayments, the average mortgage for £500k houses may well only be £150k. Will people 'need' to sell these houses ?
I'm sounding like a property bull today - lets say devils advocate.
10. matt_the_hat said...
Just a thought before you buy a house - how many people do you know with more than 2.4 kids - how many people are aged 50 and over - these will start to retire shortly and who will support them - forget about house prices GAME OVER
The only thing that can be done is to trap the productive members of society (young people) into debt secured on an immovable asset and get them into negative equity, then they have to stay and be squeezed to pay for the grey vote. If I didn't think the government was so incompetent you could start to believe this.
11. str 2007 said...
matt
The population thing - they'll ship people in if it looks like the numbers are slipping.
Unless we get higher inflation (including wages) I'd agree houses won't appreciated in value as they have done over the last 40 years or so.
However, unless the banks seriously cut back lending criteria and multiples - which they haven't. Then currently with 20%+ off peak and low interest rates people are starting to buy again. Right or wrong they are coming back to the market.
I'd like to see prices return to ave 3x times earnings, but when banks are lending 4x joint with 40% deposit they won't get there.
OK I accept FTB's won't have a 40% deposit, but I'd say 20% isn't out of the question for quite a few of them and banks will still lend on 2 salaries.
Also although the current band of BTLers in theory should have had most of their equity wiped out, entrance to that club comes at the price of a 25% deposit and a couple of priced out FTBers able to cover the interest.
In theory there should be another 10%-20% falls to go yet, but I wouldn't count on much more without another massive shock or much higher interest rates.
At the moment you mightbe abe to negotiate 10% off a realistic asking price giving you 30% off peak, but if much more money gets printed and any more green shoots appear so will the house buyers and then the discounts will quickly vanish.
12. letthemfall said...
The productive young!!! Spouting hot air on websites.
13. uncle tom said...
str 2007,
I made no wild assumptions about LTV levels. I took the actual average value of loans outstanding from the half of all mortgages that were taken out most recently, and compared them with the current average value of the properties they were secured against.
The oldest 50% of all outstanding mortgages only account for around 20% of the total amount owed - these are the people who are settled and are quietly paying off mortgages that were taken out a long time ago. The youngest 50% of outstanding mortgages (some 6 million of them) share a burden of approximately £1,000bn, making the average value of the mortgage greater than the average value of a mortgaged property.
I think you understimate the scale of the problem!