Househunters Flood Back To The Market Says Naea!

[Sybil13]

Househunters Flood Back to the Market

Thought I would post this before Rinoa did. And thought I would link it to this thread:

Is the Silly Season Coming to an End

Edited June 18, 2009 by Sybil13

[Deckard]

Househunters Flood Back to the Market

Thought I would post this before Rinoa did. And thought I would link it to this thread:

Is the Silly Season Coming to an End

He beat you by 5 whole minutes, aaargh !!!

http://www.housepricecrash.co.uk/forum/ind...howtopic=117581

[HAMISH_MCTAVISH]

Househunters Flood Back to the Market

Can any of them get mortgage finance?

Yes.

And given that there are 4 househunters for every new house coming on to the market, only one in four of them need to be able to get mortgage finance for prices to remain the same.

If one in three can get mortgage finance, prices will rise.....

[shedfish]

Can any of them get mortgage finance?

Yes.

And given that there are 4 househunters for every new house coming on to the market, only one in four of them need to be able to get mortgage finance for prices to remain the same.

If one in three can get mortgage finance, prices will rise.....

presumably buyers look at more than one house?

[Guest มร หล&#3]

How many of them need mortgages?

Could this be a flood of STR's and late/elderly FTB's with massive savings swapping fiat money (unsafe) for roof over head (safer)?

[loginandtonic]

curiously despite the sold stickers on ads in agent windows and many sold boards up (altho a good few have vanished last few days but with no sign of a removal van, bizarrely) every agent i walk past is empty but for the staff, so i assume everyone must be out on viewings or selling over the phone...

presumably then interest rates can go up now that we have our green shoots and buoyant market again, or no sorry wait a minute that would stop the bubble before the next election, cant have that can we ponzi brown?

[richcrashman]

How amny people going through estate agent doors are actually interested in buying or are they JUST window shoppers. Existing owners looking to compare what they might have lost and others just watching the prices down.

I'm in the second group and get regular details on properties with no intention of buying.

[gravity always wins]

Association created to further the interests of Estate Agents does what its members pay it to do and talks up the property market. BIG DEAL.

Nosing around other peoles houses is a national past time and is baically free it should not be confused with the business of buying a house.

Buying houses requires individuals who are WILLING and ABLE to buy a house.

ABLE to buy a house means finance and the price paid being subject begging the banks for some finance.

[righttoleech]

So we can expect similar in about 18 months, (as our house price crash is that much more recent than the USA)?

Notwithstanding that Brown pumped up the bubble higher here.

Cheers

[Guest theboltonfury]

Can any of them get mortgage finance?

Yes.

And given that there are 4 househunters for every new house coming on to the market, only one in four of them need to be able to get mortgage finance for prices to remain the same.

If one in three can get mortgage finance, prices will rise.....

And that's good because...?

Maybe you won't have to worry about selling a kidney if they rise back up.

[Sybil13]

Just wanted to add a few thoughts with regards the article because nothing seems to add up.

If:

There were four househunters chasing every property for sale during May as potential buyers continued to flood back to the market

Then why are so few properties selling?

In 2007 when there were more buyers than properties, properties were sold in days. I am still looking online at 50 + very nice properties in Dorset in the £200000 to £250000 bracket and NOTHING is selling, and I have been watching these for months.

The article went on:

In a further positive sign, the proportion of homes sold to first-time buyers soared to 43%, nearly double the one in four homes that were sold to this group during the four months to April, and a level last seen in September 2001

Now that stat should fill us bears with optimism, because if FTB's are back at levels not seen since September 2001 it SHOULD mean that prices are back down to the affordable levels pre RMBS, which kicked in in 2001, but that is not the case, and this stat seems to contradict everything else we are being told by the CML / BOE / BBA/ BSA / etc etc about FTB's. And even what the NAEA said in April after the budget when :

Peter Bolton King, chief executive of the NAEA, said : "In this difficult economic time, Mr Darling could have seized the opportunity to encourage first time buyers to the market and to send a signal of confidence that may have reverberated around the economy.

“Instead he has tried to choose a path to please everyone, which I suspect will please no one.â€

He adds: “The housing market is the engine of the UK economy and it is likely that this Budget will be remembered as largely ineffectual given the magnitude of the problem.

“There is very little here for first time buyers, who need more encouragement to climb onto the property ladder – which will get everything moving.

“Mr Darling has used a water pistol to try to put out a fire.â€

At the weekend we were told:

First-time buyers who want to get on the housing ladder have seen the number of mortgages available to those without a large deposit slump by 97% over the last two and a half years, according to new research released today.....

....Rates have also started rising after a year of falls. Yesterday, a number of big lenders put up the cost of their fixed-rate mortgages and experts suggest other lenders will follow suit.

First-time buyers are already paying a high price for their borrowing – in January 2007, the base rate stood at 5% and the average interest rate on a 90% home loan was 6.2%. Today, the average rate on a first-time buyer loan stands at 6.23%, 5.73% above bank base rate.

Ray Boulger, of mortgage broker John Charcol, said the increase in price had been driven by a lack of competition and by new rules under which lenders have to set aside more capital to cover high loan-to-value mortgages. "The cost to the lender of making one 90% LTV loan available can be four or five times the cost of offering a mortgage at 60% LTV," he said. "We're in a situation where the more lending a lender does at 90% the less lending they are able to do overall."

This week, Britannia Building Society re-entered the first-time buyer market with a market-leading two-year fixed rate of 5.09%. However, borrowers have reported problems obtaining the loan. One first-time buyer said he had been turned down by Britannia because a large chunk of his deposit had come from his parents.

"A secondary problem to the lack of mortgages available at 90% is that these deals are extremely hard to qualify for," said David Hollingworth, of mortgage broker London & Country. "Lenders are looking for people who can pass their credit score with flying colours."

Boulger said tightened lending criteria meant first-time buyers applying for a large loan had a two-in-three chance of being rejected, with lenders only interested in "squeaky clean" borrowers with perfect credit records.

We know that the money available for lending is tight and down 2/3rds due to the closure of the RMBS market and made worse by dwindling deposits.

So how can we be being told that "Househunters are Flooding Back" when we are being told EVERYTHING is DOWN on last year when prices fell and fell and fell? :

The CML, whose members are banks, building societies and other lenders who together undertake around 98 in every 100 mortgages, said 35,600 loans for house purchases were granted during the month. While an improvement on the March figures, however, the number of home loans granted in April was down 28 per cent on the same month last year.

Bob Pannell, the CML’s head of research, said that, despite the improvement in April, housing market activity was still “very low†by historical standards. He pointed out that the 35,600 home loans granted in April compared with an average of 88,000 loans during April in the last seven years.

Those loans totalled £4.5 billion — which was also up 16 per cent on the total for March — although the total value was down 40 per cent on April last year

However, the sharpest increase in home loans granted was for people moving property rather than to first-time buyers, who are generally regarded as providing the foundation for any sustained growth in housing activity.

The data also provides evidence that mortgage lenders are continuing to apply tougher lending criteria. The average loan to value for loans to home-movers was 67 per cent — down from 72 per cent in April last year and even down on the March figure of 70 per cent — while lenders were only prepared to lend an average of just 2.63 times a borrower’s income.

“Despite markedly rising buyer interest, we believe that the pick-up in actual house purchases is likely to be gradual and fitful for some time to come given ongoing tight credit conditions and still relatively poor economic fundamentals.

“Sharply higher and rising unemployment, very low wage growth and an unwillingness of many people to commit to buying a house when they still have serious concerns about the outlook are all factors that are likely to continue to weigh down on the housing market for some time to come. Meanwhile, it is currently still very difficult for many people to get mortgages, particularly first time buyers

Whilst we were told by the BSA:

Mortgage lending by building societies fell slightly in April and was 60 per cent lower than last year, according to new figures from the Building Societies Association (BSA).

Mutuals lent £1,551 million in April 2009, compared to £1,571 million in March – and £3,921 million in April 2008.

Paul Broadhead, head of mortgage policy at the BSA, said: “The rate of decline in activity in the housing market may have started to slow, but overall the lending environment remains very challenging.â€

Doesn't sound like like FLOODING back does it? It sounds down down down doesn't it? Or as First Rung said recently:

The mainstream media will generate plenty of opinion today suggesting a 'bottom' of sorts has been reached by the housing market. With transaction numbers at lows not seen since the seventies and mortgage lending 60% down year on year this would be a premature assumption when mortgage lending and sales transactions suggest an undeniable fact; the housing market is in fact dead...

RM and Hometrack have confirmed that deals are being done at 30% from peak, but as Rinoa is always saying, where is that reflected in the stats or even in the ramping that seems to suggest people are fighting to pay 2007 values whilst we are being told that not only are :

Homebuyers Left High and Dry as Mortgage Offers are Cancelled

But that:

Chains are Breaking as Surveyors Put In Realistic Valuations

So what is the basis of this NAEA report? Is it just spin ? It does seem to suggest that the YES to buy seems to come from people who haven't even got their properties on the market. As July is the PEAK month for moving according to an article I read by the CEBR , and sales taking 3 months for a YES to completion, and the average tom the market is about 160 days, anyone trying to sell now is going to looking at the autumn / winter now for completion I think they have probably lost the last chance they had for a sale where they would have been lucky enough to come out with just 25% off peak.

Edited June 18, 2009 by Sybil13

[Chest Rockwell]

Guys, I have to admit that they are plenty of idiots out there flooding back to the market...mainly driven by stupid women.

A former work collegue of mine has just bought a house for 130k, mortgage through HSBC at £750 per month. After all his outgoings he's left with less then £100 a month for himself. I asked him why? He said because it's worth it...

I've now found out that the company he works for has just announced a shed load of redunduncies...

This is bad as @rsehole's like McTwatish are encouraging high risk borrowing in a collapsing job market. Personally, idiots like McTwatish should be taken outside and hanged from the nearest 200 year oak tree with a placard round there neck to warn all of the dangers of borrowing too much money.

[shedfish]

10 houses

5 buyers

1 mortgage

9/10 houses will ultimately remain unsold, but if the 5 buyers all go to see all houses, the statistics will claim there is 5 buyers for each house, whereas there are actually 10 houses per buyer

[athe]

Can any of them get mortgage finance?

Yes.

And given that there are 4 househunters for every new house coming on to the market, only one in four of them need to be able to get mortgage finance for prices to remain the same.

If one in three can get mortgage finance, prices will rise.....

That assumes none of the buyers have a house to sell too.

[Sybil13]

How many of them need mortgages?

Could this be a flood of STR's and late/elderly FTB's with massive savings swapping fiat money (unsafe) for roof over head (safer)?

Richard Donnell, director of research for Hometrack, said: “Overall levels of market activity are well down on what would constitute normal market conditions. The willing purchasers that are returning are largely confined to the more wealthy areas of the country and limited to those buying with cash or who require low loan-to-value mortgages.â€

[symo]

10 houses

5 buyers

1 mortgage

9/10 houses will ultimately remain unsold, but if the 5 buyers all go to see all houses, the statistics will claim there is 5 buyers for each house, whereas there are actually 10 houses per buyer

There we have it in a nutshell.

[Sybil13]

How amny people going through estate agent doors are actually interested in buying or are they JUST window shoppers. Existing owners looking to compare what they might have lost and others just watching the prices down.

I'm in the second group and get regular details on properties with no intention of buying.

The article did say:

Commentators have speculated that the shortage of homes for sale, combined with rising interest from potential buyers, may be supporting prices, although others have warned that the shortage of supply could derail the recovery. But the NAEA said the vast majority of buyers also had a property to sell, which they had not yet put on the market, and in time, this would help to reduce the shortfall.

With the average loan for a home- mover according to the CML's latest stats being:

67 per cent down from 72 per cent in April last year and even down on the March figure of 70 per cent while lenders were only prepared to lend an average of just 2.63 times a borrowers income.

That is quite a bit of equity you need to have in your property.

I am thinking "slaugther of the innocents", as people read the ramping in the papers and think, "Oh Darling lets move," and then find out what this market is truly like , as Bloo Loo says: " We live in a land of broken chains", 50% + some say.

Merryn in her article : Stay Away From Property It Has Much Further to Fall said:

The truth is that all real bear markets tend to offer the unwary investor one last opportunity to lose money. The summer of 2009 is probably that opportunity this time round.

There may well be a quite a big pick up in inquiries, transactions and even prices over the next few months. This will be partly down to the fact that, for those who have cash and want to buy at some point, the housing bear market is getting boring – and partly because a lot of property looks cheap relative to its peak price.

But the basic market conditions are still all wrong for recovery

I am also thinking about what someone on HPC said an EA told them recently , that sellers wanted to sell at 2007 valued and by at 2011 values.

I am also thinking what RM's director said when he said that, "Raised Asking Prices Are Doing More Harm Than Good":

The report also said that lack of mortgage availability is hindering market recovery as sellers who have dealt with the market reality and drastically dropped their asking price are faced with buyers unable to obtain finance. Rightmove commercial director Miles Shipside said:

"Some sellers are still pricing wishfully high, though it is encouraging that elements of the market have adapted relatively quickly to find a new price floor at a discount of around 25% from peak. "

"Until banks get their own houses in order, the active minority of sellers and agents who have drastically adjusted pricing will remain frustrated by the limited functioning of the financial services sector."

Edited June 18, 2009 by Sybil13

[richc]

The figures released by NAEA are meaningless because they're always in the form of average "per estate agency" or "per estate agent" but they don't tell you what the raw numbers are. It's well known that estate agents are going out of business left and right, reducing the denominator in this equation, so it's a mathematical truism that the average per agent is rising.

This is really just disinformation one way or another, but, of course, the lazy hack journos out there just lap it up.

[Sybil13]

10 houses

5 buyers

1 mortgage

9/10 houses will ultimately remain unsold, but if the 5 buyers all go to see all houses, the statistics will claim there is 5 buyers for each house, whereas there are actually 10 houses per buyer

This sounds true and if you consider each buyer has a property to sell (confirmed by article that buyers have not yet got their property on the market), that would add to the stock of houses would it not? I assume what people are doing is reading in the papers that there are 4 buyers for your home, so they go out looking to see what they can buy before they have to cough up £500 + for a HIP and another £500 + to the agent. But would you agree to sell your property to someone who hasn't even put their property on the market yet? Guess potential buyers who have not even sold will make higher offers just to get the seller to agree, but with an average 20 weeks tom , doubt if these offers will ever be realised.

Problem being as your equation shows, there are already 10 houses per buyer, but sadly NONE of them are willing to sell at 2009 values only buy, so nothing and no one moves . As Bloo Loo says: "we live in a land of broken chains." Even the Nationwide and Halifax approvals index (based on value of loan approved), is pre - valuation, which is where things seem to break down, with sellers not willing to sell at 2009 value and lenders not willing to lend and buyers not willing to buy above 30% off peak.

Edited June 18, 2009 by Sybil13

[Guest pioneer31]

presumably buyers look at more than one house?

don't confuse the poor lad!

[Ted D. Bear]

Are these 'four buyers' four unique 'buyers' or is it a case of:

10 agents each with 10 houses

+ The same 40 buyers registered with all 10 agents.

= Headline of 'agents report four buyers per home'

Where the truth is 0.4 buyers per home.

Edited June 18, 2009 by Ted D. Bear

[Guest มร หล&#3]

Yep. And when this source of funds dried up . . .

[loginandtonic]

Guys, I have to admit that they are plenty of idiots out there flooding back to the market...mainly driven by stupid women.

A former work collegue of mine has just bought a house for 130k, mortgage through HSBC at £750 per month. After all his outgoings he's left with less then £100 a month for himself. I asked him why? He said because it's worth it...

I've now found out that the company he works for has just announced a shed load of redunduncies...

This is bad as @rsehole's like McTwatish are encouraging high risk borrowing in a collapsing job market. Personally, idiots like McTwatish should be taken outside and hanged from the nearest 200 year oak tree with a placard round there neck to warn all of the dangers of borrowing too much money.

the vi push to offload before the banks close them down is at the expense of ordinary people who end up with a lot of aggravation, real lives wrecked by ponzi brown desperate for a gen election win and the city/vi brigade desperate to keep bankruptcy at bay and fight another day. cocky prop developers have been suffering in this, and builders too, prob not all deserve the mega kick up the Rs a crash delivers, but a fair number do

[Caveat Mortgagor]

idiots like McTwatish should be taken outside and hanged from the nearest 200 year oak tree with a placard round there neck to warn all of the dangers of borrowing too much money.

Amen!

[bobthe~]

But the NAEA said the vast majority of buyers also had a property to sell, which they had not yet put on the market, and in time, this would help to reduce the shortfall.

Hmm I wonder what price they are expecting for their property.

And I wonder whether their borrowing and therefore their purchase is dependent upon attaining that price.

I seem to recall a comment in Anecdotals about how everyone is expecting a bargain but at the same time expecting peak price for their own golden property.

That may not lead to a recovery in the market, and in some cases (obviously not all) will lead to more stagnation.

It also suggests that supply is actually showing up as being lower than it actually is. The buyers are also sellers. Just because the property is not in EA listings, it will still need to be sold and so is pent up supply.

Unless her name is RIO and she dances in the sand.