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Ride_on

Loadsa Cash Buyers?

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I know many on HPC have large deposits saved, but there just seems to be alot more talk about this sort of thing, as well as alot of new FTBs who have saved. I have also noticed a few threads on the main site about EAs reporting alot of intertest and quick sales for asking price.

On the surface this would seem to be a nationwide trend, is this just new year life re-assessment causing a small revival?

Presumably the numbers are not enough to cause a permanent upturn.

Will cash buyers be the main buyers in future?

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It's a natural part of the crash to see the number of sales begin to pick up. Some people will need or want to buy now. This is what eventually slows the rate of descent. Don't think there'll be enough to start a recovery, however.

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Funnily enough last year I started a thread (I'll try to dig it out) where I asked what size of deposit people on here had - and it was massively high.

I hope there is not enough numbers to cause a long term upturn. Although I've given up totaly trying to figure out how the property market works and where it is going.

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Funnily enough last year I started a thread (I'll try to dig it out) where I asked what size of deposit people on here had - and it was massively high.

I hope there is not enough numbers to cause a long term upturn. Although I've given up totaly trying to figure out how the property market works and where it is going.

We only have about 50 regular posters on this forum, even if everyone of us had a big deposit and we all decided to buy at exactly the same time it wouldn't make any difference at all.

The bigger EAs need at least 100 transactions per month to stay afloat.

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The posts seem to stand up to scrutiny so I don't think it was ramping, and I don't think the FTB posts were trolls. However I do think these anomalies might be the reports of 'green shoots'.

The thing is in Q3 2008 there where only 670 transaction reported on the UUJ HPI report. 50, or the number of people with large cash savings in the wider population could be significant compared to this, so it might be enough to cause a blip. Once those are out of the way the downward trend will continue, bar possibly hyperinflation, but thats another story.

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We only have about 50 regular posters on this forum, even if everyone of us had a big deposit and we all decided to buy at exactly the same time it wouldn't make any difference at all.

The bigger EAs need at least 100 transactions per month to stay afloat.

Remember that very few readers are also posters. It could easily be 20/1 in terms of lurkers/posters.

That said, potential cash buyers have judged the market well so far, so why would they buy in now? Price drops are still gathering pace and I see no sign of a floor in the market or even a change in sentiment. If anything, more people are becoming bearish by the day.

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I worked as a mortgage broker in NI for 10+ years until 2008.

During this time I never once had a first time buyer with anything more than 15% deposit. Any deposit over 5% was unusual.

In general FTB'ers would visit a broker first to find out what they needed before even starting to save.

From summer 2006 I did very few FTB mortgages as nobody could afford the houses.

I did very little BTL but they were the ones who had the large deposits.

Even movers who had huge wads of cash equity did not use the full amount as a deposit on the next home. The cash was used to consol debts, buy cars & holidays and an average deposit was no more than 20 - 25%

My experience would show that the large deposits held by HPC FTB's are far from being the norm.

I am hearing that BTL speculators are in the market looking at both houses & mortgages but not much mortgage business is completing. A solicitor friend tells me that there are some cash buyers completing but not a lot.

FTB's are looking at houses.

I worry slightly that the BTL brigade may take the edge off the HPC but not enough to stop it.

There are a lot of properties to let on the market already and many are empty. The prices of houses may be down but where are they going to get tenants from?

I doubt the start of a recovery.

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Even movers who had huge wads of cash equity did not use the full amount as a deposit on the next home. The cash was used to consol debts, buy cars & holidays and an average deposit was no more than 20 - 25%

I find this shocking

but I don't find much surprising these days

I just can't understand why people embrace debt like that and don't want to lessen it

its like they don't understand how much more they are paying in the long run

I worry slightly that the BTL brigade may take the edge off the HPC but not enough to stop it.

There are a lot of properties to let on the market already and many are empty. The prices of houses may be down but where are they going to get tenants from?

good point

with a a glut of rental property already whats the point?

and generally they won''t be buying the same standard of stock as is on the rental market now with a lot of 'forced renters' putting on more and more decent sized houses in decent areas

...good post by the way

insider info + opinion is always valuable

cheers

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I worked as a mortgage broker in NI for 10+ years until 2008.

Any deposit over 5% was unusual. In general FTB'ers would visit a broker first to find out what they needed before even starting to save.

From summer 2006 I did very few FTB mortgages as nobody could afford the houses.

My experience would show that the large deposits held by HPC FTB's are far from being the norm.

We have thought this for some time. Thank you for the confirmation.

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From summer 2006 I did very few FTB mortgages as nobody could afford the houses.

Nearly 3 years of very few FTB's in the market could add up to a lot of people priced out and wanting to buy/rent, if they can get the funding.

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You shouldn't be surprised Mr Slump, in some cases 2006 & 2007 houses were sold with £50,000 & of equity and by the time that the secured loan and personal debts were cleared the clients couldn’t afford to pay more than a 5% deposit on the next house.

Mortgage lenders ask which debts are being cleared but take no action to ensure that the existing debts are actually paid off. So when you saw clients two or three years after their purchase many still had the same debts as before the purchase. Now plus a larger mortgage than before.

I am no longer in the business (there isn't any worth talking about) but do worry about a lot of people, some clients and some not, but people who are in so much debt that BR may be their only way out.

I do not however, worry about the BTL brigade as never once did a person come to me and say that they wanted to become a landlord with all the responsibilities that it entails. All anybody ever wanted was easy money.

I am one of the exceptions as I know very few brokers who do not have portfolios of properties. Some are even responsible for the sell and rent back schemes which were popular in NI in 2007 and first half of 2008.

Fingers, hands and arms have been burned.

I now have no business & no employment but neither do I have any debt.

BTL was very tempting and whilst in the industry it was hard to ignore the euphoria that existed. Every body talked about how much money they had made on property and you often saw it 1st hand and it was real.

We all got carried away, the estate agents, the brokers and the public - but the lenders went mental. The criteria for lending was almost non existent in some cases.

I think I just got lucky as I had a queasy gut feeling that things were going to get real mucky. By 2006 I was scared about the amount of personal debt that people had. I had also found this site by 2006 and gained a new perspective on the entire monetary system.

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statinstoinker- the desire may be there but most people didnt bother saving a deposit as they thought that house prices were going to go up forever and that they would never be able to afford a home so they gave up.

I would think that a lot of these previously priced out would be buyers would only have started to save late 2008 when the general public realised that the prices were dropping. As deposits required by the lenders are larger and unemployment is a realistic concern for many, it may be years before employment,price of property and deposit fit the current criteria for a purchase and mortgage.

I see some pent up demand but not the ability to achieve it.

Just my thoughts.

Edited by broken

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I am one of the exceptions as I know very few brokers who do not have portfolios of properties. Some are even responsible for the sell and rent back schemes which were popular in NI in 2007 and first half of 2008.

Fingers, hands and arms have been burned.

thats something to think about

with the insider knowledge , ea contacts, etc

maybe a lot of brokers also indulged in buying and flipping

which would account for a fair amount of hpi

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It would. Yes

**nts :angry:

couldn't this be seen as insider trading?

I await to be put right since I'm not too well clued up on such things

Edited by mr slump

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thats something to think about

with the insider knowledge , ea contacts, etc

maybe a lot of brokers also indulged in buying and flipping

which would account for a fair amount of hpi

I know for a fact EA's, Mortgage brokers and valuers were all building up their "property portfolios". Building sites seem to be the EA's favourite for flipping. A well known EA approached local farmers trying to buy up their sites way back in 2003.

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statinstoinker- the desire may be there but most people didnt bother saving a deposit as they thought that house prices were going to go up forever and that they would never be able to afford a home so they gave up.

I would think that a lot of these previously priced out would be buyers would only have started to save late 2008 when the general public realised that the prices were dropping. As deposits required by the lenders are larger and unemployment is a realistic concern for many, it may be years before employment,price of property and deposit fit the current criteria for a purchase and mortgage.

I see some pent up demand but not the ability to achieve it.

Just my thoughts.

Good to get your view Broken, sorry to hear of your plight, none of our jobs are safe, but I would think with your insight and principles you should be in a good position to make a good living in the future, somehow!

I did read some time ago that FTB mortgage awards have been in decline for more than a decade, I thought it was in one of the older UUJ quarterly reports (eg 2004), but have not been able to find it again.

I would have thought that those who could not afford to buy have been saving considering the high prices, especially if they could stay at home. Obviously not the majority, but perhaps the ones who have resisted a fancy contract phone with 1,000,000 free text/month, a brand new car loan for their Imprezza Turbo and designer clothes. I guess they have wanted to buy and now with their savings and dropping prices it looks almost feasible, especially if they have been ignoring the greater economy.

During the last year BTL has dissappeared as the bottom feeders, so almost no-one is buying at the bottom (cept a few bulls), so I think the market will reorientate itself around FTBs. ... Sinnce I bought in 1990 prices have increase x9 but FTB salaries <x2.

Just a theory.

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Insider trading? Don’t see how.

Very hard to break rules where none exist.

Early information on new build sites, & developers plans are passed regularly to estate agents and brokers. There is no law against that, as the developers need the agents to sell their properties and the brokers to get finance for purchasers.

At some stage this info ends up on a brochure or online for buyers anyway. If you mean buying off plan - then it makes sense for the developer/ builder to have sales early and discounts would be given to anybody who bought a substantial amount of property.

They are not fussy who buys as long as they buy.

The mortgages used for this would normally be BTL mortgages and therefore unregulated.

There are no regulations governing the developers, the estate agents or the BTL mortgages.

There are no rules.

Mr Slump, Moral skulduggery may have been going on but the reality is that it is not unlawful or illegal.

I suppose there may be cause for concern if for example a client arrived in a brokers office, heavily in debt, missed mortgage payments and the broker decided to take advantage of the situation - buying the property from them in a private sale for a discounted price rather than give full advice or the correct help.

Having the full knowledge of the client’s mental state (stress levels) and the debt outstanding could allow for this.

I don’t know any specific instances of this happening. My thoughts would be that this practise would be seen as questionable and immoral but again not necessarily unlawful or illegal.

I wish I could find a shorter way to say stuff!

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Ride on

Thank you for being concerned about me. You are too knid. I am returning to university in September 09 as a very mature student and no I am not going to be a teacher. I do however hope that I have choosen a career that will feed me until retirement.

At the minute I do vol work for an advice centre, mainly dealing with repossession & debt cases.

I would agree that FTB mortgages have been on the decline for several years now. My experiences are only from my wee office so may not be exactly the same as other brokers experiences but my customers/ clients (80%) spend all their money on paying debts and fun stuff. Very few could last more than a month if made redundant.

Saving is not a priority.

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I would have thought that those who could not afford to buy have been saving considering the high prices, especially if they could stay at home. Obviously not the majority, but perhaps the ones who have resisted a fancy contract phone with 1,000,000 free text/month, a brand new car loan for their Imprezza Turbo and designer clothes. I guess they have wanted to buy and now with their savings and dropping prices it looks almost feasible, especially if they have been ignoring the greater economy.

This pretty much applies to me. As i said in my introductory post, i have saved up a substantial deposit. I probably could have comfortably paid for a mortgage at 2007 prices as I have been pretty lucky to get quite a well paid job, but i have also been brought up in such a way as to not throw my money round me.

Dont get me wrong, i enjoy myself, and treat myself now and again, but i live within my means and dont waste my money. And i dont buy anything on credit - I dont even have a credit card!

I think if more people applied principles like that then we wouldn't have the economic situation we have now.

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Insider trading? Don’t see how.

There are no rules.

Mr Slump, Moral skulduggery may have been going on but the reality is that it is not unlawful or illegal.

I wish I could find a shorter way to say stuff!

nah its great you go into it more

thanks for that

like I say, I don't know what the rules are

seems like there are none

i think I was thinking of more backscratching (backhanders?)

between EAs and brokers regarding off the record quick sale flipping

were the vendor is duped into lower sale price without it going into public sale

'I know who would like to buy this at a good price...' type of skullduggery

At the minute I do vol work for an advice centre, mainly dealing with repossession & debt cases.

good man

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i think I was thinking of more backscratching (backhanders?)

between EAs and brokers regarding off the record quick sale flipping

were the vendor is duped into lower sale price without it going into public sale

'I know who would like to buy this at a good price...' type of skullduggery

The very nature of the business indicates that this must of happened at some stage but I have no specific knowledge of it.

I never worked out of an estate agents office nor did I build up strong relationships with any EA's. Some EA's made a point of telling buyers that they had to do their mortgages with their in house or preferred broker. Customers were told that this would increase their chances of the purchase completing. This is against the FSA's guidelines and often put pressure on customers to use tied agents when a whole of market broker would have provided a better suited mortgage and independant advice.

Lenders & solicitors are worth relationship building with as they can actually help speed up the process but EA's in general are a necessary burden.

Usually the surveyor is instructed through the lender and brokers have little contact with them. The exception would be for adverse mortgages where you often choose the surveyor yourself and obviously have contact then.

I understand completely that people are suspicious of the entire system and am very aware that there are several ways to work the system. It needs simplified with more transparency but more education is desperately needed by vendors & buyers. Banks no longer have a fiduciary duty to us, they are simply there to sell.

The FSA has given quite a lot of fines out recently and closed down several offices. This will continue.

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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      • Even
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      • up 5%



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