Mikhail Liebenstein

I have just done a Right Move Search for the County of Surrey where I live. To say that there is a glut of properties for sale over £1m is really an understatement. I first put in the search area "Surrey" and then set the range £1m to unlimited. At first the search came back saying "over 200 properties listed" So I thought how many more than 200, and began clicking on the more properties button and it just kep going. By the time I got down from the highest priced property to one on for £1,050,000 there were 158 pages and 1573 properties found. Doing a slightly wider search, taking in bits of SW London, the figure was over 3000. Now can some one tell me? Are there really 1573 prospective buyers looking in Surrey all wanting to spend over a £1m??? If the average value is something like £1.3 m, that would require £2bn and that is just what is one now, clearly more will come on the rest of the year. So I ask myself, what is the market clearing price for what is currently perceived by its owner to be a £1m house? Surely this could give a clue as to the size of the drop.

I entirely agree with this, a two tier market is not possible, funnily enough it is the ends of the property rope ladder that are now fraying. Point 1) BTL properties are definitely heading for a serious meltdown and there is no shortage of evidence here. These are the bottom of the ladder. Point 2) I did a Propertbee trawl for Surrey last night which as well as the green bits of the county also covered a bit of what I would term the Londony bit of Surrey which isn't officially Surrey anymore. So broadly it covered an area bounded by Farnham, Oxshott, Oxted plus Richmond and even throwing up a few in Tulse Hill and Brixton, aka bits of South London. The point of this is that there is an absolute stack of properties over £1m for sale, I mean serious volumes, ie close to 2000 - I can't for one minute believe that that many people would now want to spend over £1m right now. It was also interesting to note some heavy discounting, 10-15% in many cases, which in Sterling terms equate to £100-200k. My gut feeling about this is that this a lot of this is baby boomers who have either just retired or are thinking about it in the next 1-5 years wanting to get their equity out whilst they still can. Personally I think they have left it too late. In the next run down, say £750-£1m, there are relatively fewer properties given what you'd expect the market to be shaped like (broadly a pyramid). Now assuming most of those at the top mostly need to sell to those in the tier below I can't see how there will ever be enough buyers to allow the market to efficiently clear. So whilst with a solid aluminium or wooden ladder, you need support at the base. It is quite clear that having eliminated the FTB, the property ladder has in fact been a rope ladder for some years. Ie, it is not the base holding it up, but the top, ie the aspiration of trying to get to the top - in economic terms this is a bit like tournament theory. People compete and work their backsides off as it is a winner takes it all competition. So what happens when the rope at the top of the ladder snaps?

I posted last night on MSE suggesting this exact point. I am getting quite rehearsed at this argument now. "Why don't you knock 10-15% off immediately and you might get a quick sale. If you just muck around shaving 5%, waiting 2 months, no sale, shave another 5% and so on you'll end up 30% down having successfully followed the market down into a trough - you'll never sell with small cuts as the market is falling quicker than you are discounting." Of course the more I convince of this line of argument, the quicker the market will fall. I'd be delighted if we can do 4 years worth of slump (ie down 40%) in just 12 months.

Well everyone - I am delighted if the crash has been caused by people like us, though some how I don't think so - but happy to take the credit. Anyway I have taken much recent delight in making as many people as possible aware of the current crash and how deep the trough will be! In response to property articles on the Times website, I have posted pessimistic comments. When I strike up a conversation with friends, family or colleagues I gently let them know that the property market is going to tank. Funnily enough most now agree - with the exception of estate agents friends (surely an oxymoronic phrase - though they were friends before they estate agents). I urge everyone to do the same. People need to wake up, I am not worried about our impact on those who bought houses a few years and who might lose several hundred k of uncrystallized gains - my real concern is for FTBs and other young people who will find themselves in a life of debt servitude to a bank. This debt servitude is bad for the economy, if you have to pay 2/3 of you take home on a mortgage, you can't afford to save, and you can't afford to buy as many goods and services which is how the real wealth of an economy is created. ML

Perhaps this is the last desperate act to help the office make its sales figures. I do recall hearing in the past of sales staff at a large electrical retailer buying camcorders on their credit cards at the start of the new month. The office would hit is Jan target, but then would have refunds in Feb.

Only had propert bee installed a few weeks, but some cool reductions appearing in Surrey. Like this one date event 2nd Mar 2008 14:59:20 * Price changed: from 'Offers in Excess of £300,000' to 'Offers in Excess of £289,950' 26th Feb 2008 20:47:33 * Price changed: from '£339,950' to 'Offers in Excess of £300,000' 25th Feb 2008 19:32:45 * Price found: £339,950 Two reductions in a week!

Again we seem to be presented with slighty conflicting data on the housing stats, but actually I regard this to be in line with the start of decline that could either accelerate at a reasonsable pace or else turn to a sudden tipping point. So I wouldn't be too concerned about the recent land registry figures. On the way up, it was the estate agency websites that were the key cheer leaders as they always showed over inflated prices. If you look at these now and in particular if you use property bee you will see backlogs of unsold properties building up and price reductions across the board. The building society figures are the next in the sequence and reflect mortgage offers going through. The recent Nationwide reports showed a fall in prices, of course we don't get a detailed geographic break down with these, but they give a flavour for the market heading downward The Land Registry data is the last and most lagging. On the way up Land Reg figures could have provided some limited comfort to bears as rises were never quite as manic as the property websites - a reflection that most properties don't achieve the asking price. On the way down however I suspect the data could be comforting to bulls. The reason for this? Reason: As the market slows down and backlogs build up, the properties that do get sold in the early stages of the turning point are the ones that effectively sell themselves, ie good properties, quiet roads, nices garden, bonus space inside etc, so at the start of a down turn you see a filtering effect with the good properties (which on average attract a higher than average price) going through into the land registry figures with the dross staying unsold. Gradually those sellers selling dross come to the realisation that they are overpriced, as a result they drop their prices and eventually these turn to sales feed into the system and ultimately inform the registry figures. Given the time it can take to compete a chain, sometimes upto 9 months, there is little doubt that the early stage reductions we are now seeing on he property websites have not yet fed into the land registry system. For instance I know people who agreed deals in August (at the peak) and literally they have only just completed the original chain having just about held together. I predict that by the time we the June data from the Land Registry, we see some really serious falls, as the drops in asking prices that have beeb occuring over the last 2-3 months will get added into the figures. And serious I have seen several cases of people having to knock 10-15% off for a quick sale, so June the year on year figures will be well and truly down.

Adverts such as this seem to be increasing in frequency. In fact if you do a search for bankruptcy advice or IVA advice you are likely to get one of these before the CAB. These are perhaps born of an alliance between IVA firms (hoping for fees) and real deep subprime lenders. Certainly the tune has now changed on adverts - rather than skirt around what used to be sensitive issue of financial difficulty they are now just talking about it openly. Perhaps this will be the next badge of honour. Rather than how much I have borrowed or MEWed and then spend, maybe the phrase "well I've been bankrupted, beat that with your IVA" will slip casually into conversations. I love the quotes, all designed to show you that they really understand people like you: I had debts of £30,000 and was paying £650 a month. I thought of Bankruptcy but found a better solution in IVA. I now pay £310 a month and... — Mr D. from Leeds IVA plan reduced my monthly payment by £300 and stopped a land charge on my property... — Miss G from Wigan I had a bailiff at my door when I rang... — Mr P from Aldershot My debt was causing my marriage to fall apart. IVA was the best... — Mr & Mrs A from Portsmouth

STR2007 that is a nice example, and in particular you make a very good point about local price ceilings. It does seem that in numerous cases amateur renovators/builders have tried rather too hard to make their project special and stand out from the crowd. As a result they massively overspend on granite worktops, digitally controlled kitchens etc etc and then to make their desired profit they try and sell for close to double the previously achieved highest price on the road. My own favourite current example using the property bee plug in for FireFox is from Guildford (where the land registry reports a 9% on quarter fall). This property was originally on primelocation for £1.3m, it has recently be reduced to £1.1m However, anyone with any sense would haved checked www.houseprices.co.uk . The house's postcode is GU4 8ER and it is number 9. From this they will see that when it last sold (to the renovators) it went for the princely sum of £762,500 and that was as recently as Jan 2007. So in 12 months, given the current condition of the housing market the renovators initially believed they had added £537,500 worth of value to the property. Since then they have dropped £200k off the price, so they currently believe they have added £337k of value. But given that the property has been extended and renovated they must has spent a miminum of £120k doing that, plus £30k stamp duty when they bought, plus fees, I am guessing they need to sell for a minimum of £934k just to break even. Now going back to houseprices.co.uk, the highest price ever on the road is £762,000 (the house itself), but others have sold for under £500k in recent times. So you have to ask whether it is realistic to sell a house for £1.1m, when the price veiling on the road is £350k less than they are currently asking. Again, it is the people at the margins who will set the price!!! Sometime it is people who can't afford their mortage who are the margins, but equally it can be developers who need to offload.

Interestingly the article mentions some owners selling up a much lower price in order to get out and cash up. As we all realise this does tend to drag prices in the rest of the street down with it. I live in the middle of Surrey, and know places like Reigate, Dorking, Tandridge and Guildford/Woking quite well. Having spoken to a few agents, there are definitely cases of this starting to happen. At the moment it seems to need about a 12% discount off what would be considered a sensible asking price in order to encourage a quick sale. So for instance I know that one property on at £975k, was eventually sold for £860k. And that was good 4 bed, with an extremely large garden (i.e. acres), so would have been pretty desirable. Those sellers were probably quite wise and have got out at the right time. The ones who will get the real kicking are those who have over inflated expectations of selling on a rather lacklustre property. In some cases this is ill-advised amateurs who have over personalised and over spent on a renovation or those perhaps those who have created extra space with dodgy extensions thereby eliminating most of the garden. The danger for the people above is that they chase the market down. Reluctant to take a hit, they drop the price by £30k on a £900k house, wait 6 months and it doesn't sell. So they drop it another £30k, by which time the market is actually down 15% and so in practice they actually need to drop by £135k even to get back to the level of competitiveness from where they started. Speaking with an ex-estate agent this is exactly what happened in the last crash. It was the greedy sellers who took the biggest hit on the way down as they were too slow to adjust their price expectations, whilst the smarter money took the hit early and ultimately the hit turned out to be much smaller.

Yes, I have just loaded propertybee, though if it stores the history locally on disk I haven't had it on long enough to capture the drops. Out of the properties I pointed to in Guildford, the second has now dropped from £950k to £850k. I suppose it was inevitable, both on the same road with the same agent. Both properties appear to be amateur renovations. There do seem to be rather a lot of these in Guildford. I think perhaps a new term is needed - Amateur Renovating to SEll. I can therefore confirm there are a lot of ARSEs in Guildford.

Yes the crash is definitely happening here in Surrey: This property was massively overprices at £1.3m, just been dropped to £1.1m. http://www.primelocation.com/uk-property-f...SPGU_GFD070280/ http://media.primelocation.com/SPGR/SPGU/I...U_GFD070250.JPG and property is on at £950k, but I hear it will soon drop to £850k. http://www.primelocation.com/uk-property-f...SPGU_GFD070250/

Just watching this: In Debt We Trust - The Credit Card Channel http://www.startupcommunity.co.uk/thebusinesschannel.asp http://www.thebusinesschannel.com/?page=sc...amp;episode=232 Seems like the same is happening in the UK. Kid being trained to use credit cards by toys that simulated the swipe of a credit card.

5 Bed that was previously on at £1.3m now suddenly down to £1.1m http://www.primelocation.com/uk-property-f...SPGU_GFD070280/ There is another property on the same road, not as good for £950k, so it may fall next. The highest price ever achieved on the road is about £850k, so these look renovated for sales look seriously over priced even with the reductions.

Sorry, but I don't really agree with the negative views on Council Tax. Actually Council Tax really ought to be a lot higher or possibily be replaced by a 1% land value tax, but in exchange for lower income tax. This would stop the effect of land, which is limited due to planning restraint, from soaking the life out of the rest of economy. Consumer spending and investment will alway ultimately drop if people have to fork out half their income on mortgages. However, by taxing land at 1%, all property prices and hence mortgages would be much lower and this would kill property as a speculative investment. Frankly the whole house price issue is caused by a mafia of people in their 50+s who like the fact that they own nice houses that go up in value almost every year and hard luck to anyone who can't afford a house because we won't be building anymore on our precious greenbelt for fear of ruining the view from our lovely homes.

Well I have just done exactly that.

Hmmmm..........Chanceller tries to reassure public that there will be not crash..............sounds like a crash to me.

Ah, but one feels it needs to be low brow to get through to the chav nation. Perhaps we need a celebrity version of repossession, repossession, repossession - may be featuring Nana.

Well I don't entirely know about that. I suspect there are quite a few MPs who would like the attention, especially if they are dealing with large new build housing estates where the current occupiers have well and truly been shafted by the developers. In some areas they have added 300,400, 500 new homes, so perhaps 1000 new voters, in a tight constituency an MP would do well to win over those individuals by supporting their fight against the developer. I'd also add in reply to the argument that we don't want the land registry figures to be lowered as it will make the eventual fall look bigger, that it may actually be better to have the figures investigated. This would shatter confidence in the numbers and would make a bigger story. Not everyone saw Panorma, but if there is a major investigation that will be news.

This is the link for epetitions: http://petitions.pm.gov.uk/ I think we need some wording and also a big name to kick it off, that way it will get more media attention. My first stab would be: "In the light of evidence of widespread fraud relating to false price data provided to the land registry (ie not net of gifted fees, deposits and cashback offers to buyers) will the Government start an immediate investigation into the true accuracy of land registry data and also initiate a potential criminal investigation into the activity of those developers, valuers, surveyors and solicitors who have colluded in this practice ofartificially driving up recorded house prices. Further, will the Government also ensure individual members of the public and lenders who may have been deceived into paying higher prices for homes have a mechanism to formally raise complaints against developers and their agents and where appropriate and where there has been no collusion/criminality by the buyer/lender permit easier access to legal remedy for the deception." Any thoughts on this? The reason for the last sentence is that we need to smoke out the crooks, the easierst way to do this is if buyer/lenders who potentially are the victims are able to raise the issue for investigation.

This is probably one for Vince Cable. Giving the evidence in Panorama which is clearly the tip of an iceberg, shouldn't some of our MPs now call for a full investigation into house price statistics held at the land registry in the light of the apparently wide spread fraudulent inflation of recorded prices. Perhaps one for an epetition on the Downing St Website!!!!!!!

Are you really renting a £450k house for under <£1k per month? If this is the case then the landlord/lady is clearly extremely stupid. If they put the £450k in the bank at 6% they'd get £2250 per month in interest. If they have a mortgage they'd pay out evenmore than that in interest.

I have posted an article from the Guardian on this. I also think it is good idea: http://politics.guardian.co.uk/comment/sto...2190547,00.html

It seems the £800k+ market in this part of Surrey is in danger. Its very much a secondary aspirational area, so while those with new money might move to somewhere like St Georges's Hill in Weybridge or other similar privates estates, there is a slightly lower rung that might have picked some of the private estates in around Taworth and Kingswood. This drove up prices rather too quickly when things were rising, and so now there is a risk of significant downside for new buyers. Houses on for £800K are probably only worth £650k, those on for a £1m probably just £800k and those at £1.5m or more the overvaluations are evenmore wild. The problem is that the area does suffer a few defects such as noise and pollution from the M25 and Gatwick and so buyers are being fussy with properties staying unsold for longer. Any similar experiences in Surrey?