Father Fred

I heard that round my way there'd been a fair few repossessions whereby the lender, having repossessed the properties, discovered that they had lent 50% more than the ceiling price for the road. I can't remember my source, but a reasonable one - but not one I'd bet my house on (if you'l pardon the expression). The RICS could only be sued if they had (1) Failed to disqualify a fraudulent surveyor who they should reasonably have known was fraudulent. (I can't see that they'd do this). (2) Their procedures produced wrong results (if the reason for the valuation was fraud then this wouldn't apply) FF

If Rosie Millard is qualified to write about property then I'm applying to the Times for a job as their ballet critic. Has she got a case for suing the Times for allowing them to let her hummiliate herself in public every week. Utter drivel, almost the entire article, bar the rather obvious advice that since prices doubled and rents haven't gone up BTL isn't as profitable.

I would love it (just LOVE IT) if the government brought in lots of new regulation / licensing. Knock 50-75% of agents on the head, make the remaining ones better, twice as expensive and more profitable. I might even re-join the industry!

Anyone who shops around uses some common sense can find a half decent estate agent. Anyone who thinks Asda will offer a better service is wrong. Anyone who thinks Asda will offer a cheaper service is may be right. The thing with estate agency is that you need people who are mobile in a small area - as an agent I could offer a better service to people if the properties were within 500 yards of my office, and a couple of miles was quite a long way away. So it doesn't benefit economies of scale like many industries. And ideally with local knowledge as well. Secondly, I have no idea how EAs make money at all - fees are far too low. Thirdly, people really do appreciate a proper service. A senior negotiator valuing and offering marketing advice. Negotiators agreeing a sale, and then one person (one of the former or a sales progressor) monitoring the sale all the way through. Automating the process is very hard. Linked to 3, fourthly... in Burger King they automate the process and make burgers before they are ordered. But they offer a service whereby you can order a "special", with extra gherkins for example. If everyone ordered a special, then the whole process would become much slower and they'd have to raise prices. What Asda doesn't realise is almost without exception every single house sale is a complete and utter nightmare for a wide variety of reasons (slight exaggeration). Asda probably think they can offer a service and not deal with the awkward stuff. Well, I've got news for them.... it's very hard to work out what will be a nightmare and what won't, and besides so muuch is a nightmare that if you did just do the easy work you'd be restricting your potential market by 75%.

It makes a lot of sense avoiding estate agent's if you are a buyer... most EAs are competant (semi!) professionals who will help the vendor get the best price. If you're buying it makes much more sense to seek out the small percentage of private vendors who are selling at a reasonable price for any number of reasons. Of course lots of private sellers are only selling privately because even EAs who are short of properties won't take them on at the extortionate prices they want.

When someone as daft and loaded as GingerTosser (as I like to call him) spots that prices are ridiculously high then you know there's something in it! Reminds me, I once walked into a pub and was blown away by this absolute stunner in there, and then I noticed this dickhead lording it over his minions who was with her. Yep you've guessd it, Chris and Billie (I'm not even a fan, but she is STUNNING in the flesh).

I am not saying IO is great, or great for everybody, but it does mean you are locked in at a particular price therefore you are hedging your bets against further price rises. Ideal for a recent graduate in 2000 who could buy IO rather than wait a 3 years to save a decent deposit only to find prices had doubled. After a few years of 'renting from the bank' he could switch to repayment when his wages were higher. To slate IO absolutely is foolish

the two things that annoyed me most - (1) past returns... we need long term real returns, deliberately done not to be unduly influenced by cycles. (3) predictions... who made them? on what basis? what assumptions have they made? what will rental growth and wage growth be over the same period? for god's sake, there was absolutely nothing about those predictions that said anything about anything, and to make matters worse they are presented as the likely scenario (why talk about them unless they are the most likely scenario?)

A few points at random (1) My girlfriend’s comment “if she can make it anyone can” (2) The £300k BTL in Oxford. You are looking at 4.63% yield if you add stamp duty and £1500 fees / legals to the purchase price. To cover the interest at 125% coverage (a typical amount) you would need a £100k deposit. (3) My eagle-eyed girlfriend again… the bit where Kirsty was talking about her flat and referred to the “washing machine” as she turned and laid her hand on the cokker. If she can’t tell the difference between different kitchen appliances then how the hell’s she going to spot an investment?

Had it occurred to you that most people are actually quite bullish in the country as a whole? This site is completely unrepresentative. I'm not saying that everyone is predicting 20% rises but stability, slow growth, soft landing is the consensus. Let's have a scale, 1 being complete bear, 10 being complete bull. I think I am about a 3 or a 4. My guess is people on this site who remember me think I'm a 6 or 7, maybe even an 8. When I speak to friends (banker who has a BTL, another bank worker who has let his PPR and is renting, girlfriend - potential FTB, a couple of estate agents) they all think I'm a 1. VIs as you call them do not think they'll change the market, and if they do they are stupid... people have different opinions and if it is bullish then they are an EA or mortgage broker and a VI, if they are bearish they are looking to buy a bigger house, or a first house and are equally a VI but don't get labelled as such.

spot on as usual!!!! (i'm hoping flattery will get me somewhere ;-) I wasn't joking, but studios are more risky than other flats so a bad idea from that point of view. My girlfriend is looking (due to large deposit from parents and pressure to buy from them (i'd happily be pressured with the deposit on offer!)) She has pretty much decided that the nice bits of hackney aren't much cheaper than clerkenwell. ditto pimlico relatively good value. also heard a typical VI bit of nonsence last week on the radio... but she did say pimlico and parts of bayswater were the best value at the minute, and the "up and coming" places had already up and came! if you can't get the place you want in a half decent area at least consider other areas. and check yield and demand... if the worst came to the worst what would be a half deceent BTL if you were forced to move out and for whatever reason and you couldn't sell.

not perceptive - it's obvious!!!! if i had a budget of 180k as an FTB now i'd be tempted to sacrifice space and buy a studio in pimlico. seriously, some of the better areas are the best value now!!!!! i can understand the personal reasons for wanting to move... but in all honesty, if you are a decent person then you should be able to live in a fairly good houseshare. maybe try to find a resident landlord just looking to rent a room to make ends meet... less like a houseshare (even though you are still sharing)

that is quite funny!!

Prices are still rising in some areas - but to me that makes a crash more likely, not less so... there's only so long you can stretch a piece of elastic before it snaps. If I were a potential FTB I would work as hard as possible to save, and only buy if you can genuinely afford a half decent place - and even then, are you sure you want to buy? Can I make a prediction - you currently live in a better area than the ones you are considering buying in? Can I make a second prediction - your mortgage will be more than your current rent? If both of the above are true then the only possible purposes of buying now are "getting on the ladder"and "benefitting from price rises". Are they good reasons at the minute?

I personally think that the whole Al Murray character is pathetic. If he were in any way accurate (of a sterotypical, stupid, bigoted pub landlord) then he'd be talking about "coons" the same as he does the french, south africans, aussies, germans etc. If you're going to "expose" the stupidity of racism in your act then go the whole hog, portray the character as he really would be in real life, and don't be such a coward. Oooooh, let's mock the French, shame I ain't got the guts to slags off the blacks too. I saw him live once, and it was full of white middle class people (like me!) chortling at how risque (yeah right) this poor little working class character was. Yeh mate, just cos your too cowardly to slag off the blacks, you still didn't get any to come to your show did you? His slagging off of estate agents is presumably similar to his racism - he is exposing the stupidity of those who stereotype swathes of society without realising that people should be judged as individuals not slated for being part of a group.

I am pretty sure that the primary reason for doing this is the sort of short-termism that the UK is legendary for. Directors are rewarded for short term share performance, shareholders don't care about 2 years time, let alone 20 years time. It all adds up to "selling the family silver" for short term "shareholder value*". * shareholder value defined as short term boost to share price and fat bonuses for directors.

Property is vital - huge amounts of the county's wealth is in property it's the biggest investment most people make it is the biggest "creative opportunity" most people have (to make it how they want it) it massively affects your standard of living - both in terms of how much of your income it takes up, and the increased quality of life if you have a decent home that is big enoough for you and your family can bring.. it's not the be all and end all but it isvital, and a very important topic of conversation

i think you're referring to me, and my point was that most BTLers are probably in better shape than you think and are in it for the long term... but there are ogoing to be a few in trouble, mainly those with new builds. Magpie... you have again expressed my thoguhts more eloquetly than i could!

That sums up a lot of my feelings, but just to clarify I'd like taxes to encourage jobs and people up north to declining industiral areas and not to greenfield sites anywhere. As for others comments, I vary between thinking a crash is possible to thinking we'll have 5 + years of stable real prices (or maybe only stable nominal prices)... who knows, but there are arguments that I put forward that do imply that it COULD be different time, not that it is or will be, but that it could.

Just got thinking. Let's say prices levelled off in mid 2005 and are now starting to fall, and let's say they will fall 30% in nominal terms over 3 years, before starting to rise. Let us also assume that they were rising at 15% per annum prior to mid 2005. Forgive me for rounding but - 2003 buyers - will be fine (well, a poor investment but they're on the ladder which means a lot to many people) 2004 buyers - will be 15% down if they sell at trough 2005 buyers - will be 30% down if they sell at trough How many people does that really affect... not a huge amount in my opinion. Most buyers will not be forced to sell, many that do will be trading up so will benefit from having less of a step up to make. As for would be FTBs. How many will spot the trough and buy in 2008, and how many will watch as prices start to rise and end up buying at only 10 or 20% off current peak, or worse still miss the boat a second time? FF

Prices round me (E Ldn) have gone up about 5-10% in the last 9 months (unusual case perhaps).

My opinion (as a southerner) is that govt policy should not be to build on undeveloped land, rather to use taxes to encourage business and people to declining areas to take the pressure off of the south east and london in particular. No one want to argue against my earlier 6 points by the way? Comme on, they weren't that good that they are all above discussion! FF

they may mean geared. and they may mean after tax (assuming CGT on shares and owner occupation = no tax on houses)

(1) People are stubborn and will not accept lower prices than they believe are fair (ie peak prices) unless they have to. There are still few forced sellers. I appreciate that this may happen if unemployment or interest rates rise (even a small amount) but there is no guarantee either will rise much. (2) Houses are being considered more seriously by institutional landlords... we could well be entering a period whereby they start buying residential in large numbers. This along with BTLers using houses as pensions means house prices should be judged in comparison with other assets such as shares and gilts. 5-6% (off the top of my head) could be considered a fair long term yield if inflation stays low. (3) Linked with (2) house prices will become more linked to rents and rents have been rising below trend for a while so may be due a rise - especially if FTBs priced out means more renters. (4) House prices have never crashed in the UK in a period of low inflation and interest rates (3 previous crashes in early and late 70s and early 90s were all characterised by high inflation and interest rates, low nominal falls but high real falls. (Linked to the psychology in (1) people are more likely to sell if there have been real falls compared to nominal ones - they can't see real falls but they can nominal). (5) BTL is more popular now than ever and they are the least likely to sell in a downturn (they are generally in it for pension not short term cashflow). Professional landlords might sell before or during a downturn, as might families for personal reasons, but BTLers are in it for the long term and less likely to be affected by short term movements. (Some may not even be able to afford to sell in a downturn if they are relying on the income or are highly geared and prices fall whilst income is maintained.) (6) Immigration which will put upward pressure on capital values and rents. As for buyers, I know 4 people (off the top of my head) who are buying / looking - 1 - getting married, one fairly good income, one good income. 250k budget 2 - family with adult kids fed up in flat - buying house. 3 incomes and family business as builders makes this pretty easy 250k budget 3 - ftb given large sums by father who wishes to avoid inheritance tax by starting to give his money away now. 250k budget 4 - couple with young child looking to buy a house (they have let their 1 bed flat and are currently living in a 2 bed rental place). one fairly good income, one good income. 350k budget they all seem to be able to afford something reasonable in a reasonable area (they are not necessarily representative but they can afford to buy). There are buyers out there. (This is aside from a mate who is considering his second BTL - I think he resents me for having played devils advocate in a bearish way and put him off buying a third property before) Amongst many of my friends I am known as an Uber-bear, but on this site I am a bull compared to the consensus around here!!!!

You have no idea do you... a house is worth what the owner says it is worth. It's the rest of the world that is wrong. I went on a valuation once and the owner said he wanted £225k for his house - I thought £200k. When I asked him why he thought his was worth £225k he replied - because the one over the road has just sold for £225k. I looked from the front door of his hovel (roof shagged, windows worse, interior appalling - illegal HMO for years by the looks of it) to an immacualte looking place over the road with a board outside. Rang the agents... it was on at £225k, dropped to £220k and sold for £205 or £210k I think. Owner logic at it's best.