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cakehead

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Posts posted by cakehead

  1. Society will get a lot more violent, its already happening.

    When people can generally get by they are normally law abiding but when people lose their jobs and houses they dont respect the law.

    Crime will increase which will increasingly go unsolved and unpunished.

    People will get more tribal. More violence between races.

    The rich will be able to afford private security but for everyone else it will be a harsher and more brutal place.

    And a very merry Christmas to one and all..!

  2. You mean to tell me, in your search for a bargain of over 5 years (and it appears you agree there are bargains), you didn't manage to land one?

    Yep. Bear in mind very few properties come onto the market in stagnant periods and there's always interest in the ones that do. By '97 they were pouring into EAs windows and going for top dollar. I managed to buy then, gambling that the variety compensated for the higher prices being asked.

    Finding the bottom of a housing market is much harder than calling the top.

  3. Be interesting to debate this with more figures (that I don't have).

    There was a classic on Homes Under The Hammer last week.

    Middle aged woman buys property at auction, no survey, no finances in place, but had been meaning to do it for years and just jumped in (prog. dated 2007). Completely ill thought out and unprofessional.

    She re-mortgages her house to put a deposit on the property (in need of a lot of work) and states that the rent valuation will 'just about' cover the IO mortgage.

    States she expects it to take three months to do the place up (by a mate who does DIY it appeared).

    This woman is working very hard to rent out a house for the bank, indeed, she is making up the shortfall and taking all the risk.

    She makes no profit, in fact a loss, and I wonder what sustained capital appreciation would be required to even break even after the true costs are taken into account?

    Just how many people like her are out there?

    Quite a few, but probably not enough to bring the rental sector to its senses. The vision is compounded by memories of Sarah Beeny encouraging speculators not to put in that hardboard roof / drive in swimming pool / breakfast bar lavatory and still getting a fast return.

    The BTL'er making a killing has gone into folklore and the plain facts will take a while to catch up.

  4. It's because the SE housing market is lead by novelty. Instead of the protracted downturn taking years to pan out many of us expect, the media-lead southeasy believe the recession was that blip between '08 and '09.

    Having said that a family member who works in the city says it's been like a bloody beano since the summer and business is booming.

  5. I was looking in the most attractive villages surrounding a midland market town. Having bought and sold a good few houses over the years I can guarantee a couple of things, one, that there are bargains to be had, two, that they're few and far between and you have to be decisive when you see one whatever the market conditions.

    Where I take issue with many on this board is the belief that their ideal home will be suddenly affordable. If it's your ideal chances are it'll be a lot of other people's dream too and if it's affordable to you it will be attainable for others. Of course I'm talking about the middle market, if you're earning over £250k pa you may have additional financial leverage in upmarket properties. For the rest of us a property's desirability remains a fixed due to factors like location, era, condition, availability of similar properties, schools, transport links, etc. Financial restrictions may change and such a property could theoretically fall by 50% but it would mean the rest of the market falling by 80% or whatever.

    One factor that may distort the figures is unique or unusual properties tend to attract disproportionately inflated prices in boom periods, which means their price drops seem greater. That tells you nothing about the price of other 'lesser' properties in the area. Speaking as someone currently looking to buy my nice leafy Edwardian house in an uncompromised location I'd gain enormously if my summary of the facts was wrong. Experience suggests I am not but we shall see.

  6. Wonder where cakehead lives?

    Not in leafy Edwardiana if that's what you're suggesting. You're making a mistake not uncommon on this board of seeing vested interests where there are unpalatable facts. The HPC where all houses fall by a similar amount and deposit holders move seamlessly into their chosen gaff was always a myth. It was in the nineties and it is now. If it wasn't I'd have picked up a bargain in '91-6.

  7. property dropped about 40% from the peak of 88 to the bottom in 94/95, yes some dropped a bit less some more , but overall it was about 40% .

    Think it through and you'll realise that can't be the case. A desirable Edwardian 4 bed detached with original features on a leafy road in a high achieving school catchment falls the same percentage as ex-local authority house on a sink estate? They simply do not. Neither will defy market forces but the market dictates 100 people will be interested in the 4-bed detached maintaining a competitive element, whereas two or three might take a risk on the ex-council house.

    I don't agree with the OP's figures but he is right in principal, which is the curve peaks in properties with the right mix of desirability and affordability. Neither grotty flats in rough areas (to take one extreme) or Jacobean mansions with country estates (to take another) will attract a large enough market to maintain sufficient competition to keep prices high, relative to other factors. Attractiveness and financial attainability meet in the middle of category two and slope away either side of that point.

  8. A house valued at £250k in 88 was well into group 2 and by what you have written above dropped in value like the rest of the market. They all dropped !!

    Nobody's arguing prices dropped. The question is did they fall across all house types and locations by a similar percentage including asking and achieved values. Clearly they did not. As an example I bought a house at peak and sold it for 50% more in the trough three years later for having done a little remedial work and a lick of paint. You can't generalise.

  9. Indeed but the asking price at the EA was 'only' 25% more than I had to offer and we're talking about particulars being sent regularly and over a period of some years. The media and dinner party chatter would suggest someone would have bitten at 1/4 less than asking, but I can assure you none did. Some properties that could be described as bargains did appear, but they were very rare and were snapped up immediately, even in a stagnant market.

    It's also worth remembering that properties priced at peak are best described as notional, with only a very narrow window and limited number of sales representing that peak price, the working peak, i.e. the price at which property sold quickly and in numbers, is much less. The place we rented had been valued at £250k in '88 we were told, whereas the owner would have had to wait well into the noughties to have realised that price, probably about '05.

  10. I had £60k to spend on a house between '91 and '97 so I was looking at property in the £80k bracket, which is a reasonable definition of bargain. Although cheaper (and much more expensive) houses were selling for 25% less than asking price there were none in my target market even though some had a sign out for years.

    This was partly due to supply which meant competition for any new or interesting property that appeared. The market began to move upwards late '96 and the properties I liked sold for close to their asking price, as did the mass of others that appeared.

  11. No it doesn't. I've provided evidence that properties fall at the same percentage rate. This is an incremental system.

    It really isn't as you'd find out if you put a serious offer in on a house. You've provided one set of asking price comparisons in one area. I can guarantee that if I made three offers tomorrow in a grotty local area that were 25-30% below asking price at least one would be taken. If I put the same offer reduction in a middle / up market suburb I have in mind I wouldn't get a bite.

    Desirable properties in desirable areas will sell for a lower % reduction, averaged across similar property types, than less desirable property/locations, in a falling market. It's a fact of (competitive) life.

  12. Proof?

    Put an offer in and see who's right.

    As I said earlier, there were no bargains in the 90s in group 2 and I looked every week for six years. The first category had houses for half price if you were prepared to buy one. House types and areas do not fall by the same percentage because the competition for them is not the same.

  13. There's a repetition of science, technical and engineering as worthy of attracting funding. These are declining areas in the UK economy, Britain's unique selling points are the creative industries which often overlap into technical areas and seed their regeneration and bring new ways of applying them.

    Technical disciplines for their own sake have no clear commercial applications and no-one can say what future demand will be. It's the usual cart before the horse social engineering that has seen UK manufacturing fade into a shadow of its former self. What's needed is innovation across the board and abandonment of old fashioned arbitrary divisions. That's before the nation estimates the financial and social cost of having 18-25 year olds lying idle and claiming social security payments.

  14. Prices drop across the board, his argument is too simplistic.

    They clearly drop across the board, but not evenly. Hardest hit are grotty terraces in bad areas, new build residential blocks, 'executive' homes from the usual corporate builders. Traditional semis and detached in nice areas are more in demand and generally have owners with least need to sell.

    A 40% crash in the first category might see an 10% fall in the second. The two categories will never fall by the same percentage.

  15. Buying a share in a privatised utility is profiteering because the issue is priced so the initial investor can't lose. Accepting a de-mutualisation payment is similarly loaded in favour of the 'gamble'. BTL mortgages are an extension of exactly the same principal, the only difference is the effects are obvious and not tucked away in an overseas sweatshop or South American logging camp or wherever the bottom line is.

    BTL chickens roost at home.

  16. The answer, clearly, is that all schools should be better, particularly the deprived ones. Even back in the day there were good secondary modern's and crap grammar schools - and vice versa. True social mobility will always be the preserve of the extremely intelligent (Oxbridge firsts, whatever their social background) and the gifted entrepreneur. As another ex-grammar school kid of an earlier generation told me, they were designed to create an administrative class for a functioning empire. Neither the administration nor the empire exists.

    Schools need to nurture imagination and self sufficiency in a changing world, not stream people into failure and success because they're rubbish at the three Rs or quizzes.

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