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dredwerker

Absolute Froth Come Off But Prices Still Absurd

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I looked at a 3 bed property in a town outside of Brighton and it had been on for circa 6 months and they had dropped it £50k to £200 but its an ex-council house squashed up in corner with no on street parking.

With wages plummeting and interest rates likely to go anywhere all they have done is take off the silly £50k from the asking price. I want to see this type of house really having its price slashed to sell, before I believe there is an actual crash.

If ther is a crash it is definitely jerky but after a London anecdotal from a friend they wanted to keep their asking price and knock the next tier up - down - which doesnt make sense and they realise that - but they are hanging on to their asking price.

Anyone found any real discounts not just people beiing a bit more realistic with the asking prices?

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It is your duty to put in an offer that reflects reality, it is a process of educating vendors, persist and you'll get there.

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I looked at a 3 bed property in a town outside of Brighton and it had been on for circa 6 months and they had dropped it £50k to £200 but its an ex-council house squashed up in corner with no on street parking.

With wages plummeting and interest rates likely to go anywhere all they have done is take off the silly £50k from the asking price. I want to see this type of house really having its price slashed to sell, before I believe there is an actual crash.

If ther is a crash it is definitely jerky but after a London anecdotal from a friend they wanted to keep their asking price and knock the next tier up - down - which doesnt make sense and they realise that - but they are hanging on to their asking price.

Anyone found any real discounts not just people beiing a bit more realistic with the asking prices?

I have looked at comparable properties to my own in central london and in eastern england and I would agree with this... in central london prices may well have dipped from the absolute frothy peak where my flat might have sold for £1m... but even today it'd sell for £800-£850 ( and to frank if someone had told me it would multiply 2.6 in a scant 9 years then I've been really happy).... in my view it would need to drop to soemthing like £650k/£700 or even a little lower for this to feel like a genuine reduction in prices. Prices only went over about £850 a year before the top so that final frothy piece of gain feels like no real loss at all. Eastern england seems slightly different as there seemed to be much fewer gains since about 2005 and prices don't seem to have fallen back much from that point yet.

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I looked at a 3 bed property in a town outside of Brighton and it had been on for circa 6 months and they had dropped it £50k to £200 but its an ex-council house squashed up in corner with no on street parking.

With wages plummeting and interest rates likely to go anywhere all they have done is take off the silly £50k from the asking price. I want to see this type of house really having its price slashed to sell, before I believe there is an actual crash.

If ther is a crash it is definitely jerky but after a London anecdotal from a friend they wanted to keep their asking price and knock the next tier up - down - which doesnt make sense and they realise that - but they are hanging on to their asking price.

Anyone found any real discounts not just people beiing a bit more realistic with the asking prices?

Yes, there are a few of them around, but they sell very quickly, while all the stupidly priced properties continue to gather dust in the estate agents' windows.

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I have looked at comparable properties to my own in central london and in eastern england and I would agree with this... in central london prices may well have dipped from the absolute frothy peak where my flat might have sold for £1m... but even today it'd sell for £800-£850 ( and to frank if someone had told me it would multiply 2.6 in a scant 9 years then I've been really happy).... in my view it would need to drop to soemthing like £650k/£700 or even a little lower for this to feel like a genuine reduction in prices. Prices only went over about £850 a year before the top so that final frothy piece of gain feels like no real loss at all. Eastern england seems slightly different as there seemed to be much fewer gains since about 2005 and prices don't seem to have fallen back much from that point yet.

I have seen a lot of prices doubling between circa 2000 and 2002 so a £100k property became £200k. That property should be ~155k if house prices rose at 5% pa - though that seems high as wages dont do that and how do people pay that back but hey.

A £100k house would be more like £130k at 3% after 9 years according to Wolfram Alpha

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Crashes always take longer than they should. It has taken eight years for the boom to peak, so it seems normal to me that the crash will take at least half as long. We're only 2 years since the first admittance of a problem by the hypers and spivs, and barely a year on from banks beginning to go belly up. We're also right in the middle of the usual bull trap statements of green shoots and "recovery" so desperate are they to carry on the denial and of course the press picks this up like a golden chalice.

The crash will continue its long course and prices will have to come down much further, probably accelerated by the fact that interest rates cannot stay at virtually zero for much longer and mass unemployment is round the corner. Unfortunate but all this will speed up the falls.

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Can I also ask, what is up with the Nationwide Graph on the front page. It is showing prices as crossing/hitting the trend line, but we are nowhere near 3.5 times salary. Is their trend line based on income multiples?

The trouble we had when house hunting at the beginning of the year was finding somewhere we liked, which was also negotiable on price. We did find some 'relatively' good deals, but we didn't like the place for one reason or another. There was a lot of emotion involved, both for us and the sellers.

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a colleague recently put his flat [NE London] up for sale and had found a buyer within a week, when someone on here tells a tale like this i normally smirk and think to myself, "yeah, and i bet your mum lets you have chips for tea every night", imagining that person telling the story is an EA living out his fantasies through the web.

but no, this chap is perfectly honest, so i've no reason to disbelieve him, but the thing that makes the story interesting and relevant to your question is that he deliberately set his asking price at almost 20% off peak, so back to 2004 prices or whatever. which is a reasonable [if not exactly amazing] discount, i was half surprised that an EA 'allowed' him to do it. TBH, if i was him i'd have tried listing it for at least a few weeks at a peak or close to peak price, no harm in chancing your arm is there, and plenty to gain if you can find someone gullible enough to swallow it...?

i was recently looking at places in kent and many, maybe even most, asking prices in the bracket i was looking at seemed to be around 5% higher than peak selling prices. nothing selling, funnily enough.

Edited by the flying pig

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i was recently looking at places in kent and many, maybe even most, asking prices in the bracket i was looking at seemed to be around 5% higher than peak selling prices. nothing selling, funnily enough.

Same in Shropshire. Tiresome business this damp squibb HPC.

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I've been looking in the Oxfordshire area, Didcot to be precise to be near my work. There's a newish estate there affectionately known as the Ladyboys, where 2 bed semis or terraced went for up to £190k at peak. They dropped back to £160ish at the turn of the year, but they've steadily been on the rise. Some chancers are even asking for £190k again.

A friend of mine bought a 2 bed place in 2002 for about £125k, and a friend of a friend bought a 3 bed for £80k back in 98/99.

I'd been very tempted to buy there before but couldn't afford it. I'm glad I didn't now. Crash aside the houses are in the shadow of Didcot power station, too near the railway line and very crammed in. If I were to spend the same on the other side of town I'd get an older house, with a larger garden, more parking spaces, fewer neighbours etc.

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I looked at a 3 bed property in a town outside of Brighton and it had been on for circa 6 months and they had dropped it £50k to £200 but its an ex-council house squashed up in corner with no on street parking.

With wages plummeting and interest rates likely to go anywhere all they have done is take off the silly £50k from the asking price. I want to see this type of house really having its price slashed to sell, before I believe there is an actual crash.

You're right. I won't believe we're arrived until this sort of house is getting no bids at auction on a 20k reserve.

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The only thing propping the market up is the government's absurdly generous rent payments.

Owners can refuse to sell even if their financial circumstances dictate they must and instead rent it out to someone who also can't afford live there while the taxpayer foots the bill.

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I looked at a 3 bed property in a town outside of Brighton and it had been on for circa 6 months and they had dropped it £50k to £200 but its an ex-council house squashed up in corner with no on street parking.

With wages plummeting and interest rates likely to go anywhere all they have done is take off the silly £50k from the asking price. I want to see this type of house really having its price slashed to sell, before I believe there is an actual crash.

If ther is a crash it is definitely jerky but after a London anecdotal from a friend they wanted to keep their asking price and knock the next tier up - down - which doesnt make sense and they realise that - but they are hanging on to their asking price.

Anyone found any real discounts not just people beiing a bit more realistic with the asking prices?

Apartments and houses on ghetto estates have taken a hit but your average family home is still well over priced.

And why do we have so many apartments - that'll be the regulations / advisory policy on housing density. The Government are great.

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I've been looking at a froth off only area too (part of London). I prefer findaproperty to rightmove. They have a "sold prices" button which brings up all house sales in the street with date, price, house number. I sometimes look at that page with absolute amazement. 2002 prices look like typos.

What gets me is sometimes the start of 2006 sold prices look cheap too.

Granted this only works in streets where the houses are all the same. I do try to make sure I'm roughly comparing apples with apples.

The thing with prices is that you only have to drop your house a little to get it sell (hopefully). If you were going to sell in 2007 then the market starts to wobble, you are not going to say right, list it for 40 percent less. You only have to beat other vendors with heads in the sand. Hence the slide is slow.

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I used to think we'd have a crash along similar lines to the last one... eg fairly steep drop, with few rises until it nears bottom, then bobbling for a couple of years... I now think this one will be long and slow, never reaching the kinds of overcorrection we saw in the last crash... its quite possible what we'll see is another say 10-15% over the next 18 months or so and then sticking with that level for another couple of years or so... so using the stats prices would be something like 30-35% off peak plus inflation in 2013....... it may be they rise a little before that , or don't fall that far... but I feel its going to be something like that including inflation so in £ terms people will see less.

Personally I would have preferred a quick and harsh drop but I just don't think its going to work like that... I know everyones harping on about unemployment driven falls but I really can't see that happening too much either. There goes my hopes of being able to sanp up some bargains.

The only consolation for those wanting some degree of stability, is that post 2013 I doubt prices will shoot away and it may well be 2017-2020 before we see peak prices in £ terms (let alone allowing for inflation or wage inflation)... in other words with prices at 2007 levels in 2020 then affordability will have improved enormously.... average wages may well be over £35,000 by then ( or more if inflation is slightly higher)....... so the next ten years will see greatly improved levels of affordability compared to the last ten years.

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I used to think we'd have a crash along similar lines to the last one... eg fairly steep drop, with few rises until it nears bottom, then bobbling for a couple of years... I now think this one will be long and slow, never reaching the kinds of overcorrection we saw in the last crash...

It occured to me that that might be one real effect (other than merely delaying) of the media manipulating and government meddling that if they slow down the fall it might not have the momentum needed to overshoot very far. Just a guess and not sure i can apply physics in this scenario but it seems logical.

Other than that i disagree with your post i think as prices are still way unaffordable they still have an equally long way to fall. The factors that held the prices so high are not going to be around for a long while so i see no reason to think prices are anywhere near bottom. Another 50% from here after 10 years of depression? Who knows.

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I looked at a 3 bed property in a town outside of Brighton and it had been on for circa 6 months and they had dropped it £50k to £200 but its an ex-council house squashed up in corner with no on street parking.

With wages plummeting and interest rates likely to go anywhere all they have done is take off the silly £50k from the asking price. I want to see this type of house really having its price slashed to sell, before I believe there is an actual crash.

If ther is a crash it is definitely jerky but after a London anecdotal from a friend they wanted to keep their asking price and knock the next tier up - down - which doesnt make sense and they realise that - but they are hanging on to their asking price.

Anyone found any real discounts not just people beiing a bit more realistic with the asking prices?

£50k off wow!!! here in Boston Lincs detached have dropped maybe £15k eg. 4 bed £199k now £185k. by contrast at the lower end of the market semi's and terraced have dropped maybe £20-25k :blink: . i think people in detached houses are under less pressure to sell, so are digging in with the attitude if it doesnt sell for that ill stay where i am. strangley there were quite alot of detached properties with sold on them a couple of months ago, but not many semi's or terraced. maybe people with money decided to spend a bit more and buy a detached?

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Anyone found any real discounts not just people beiing a bit more realistic with the asking prices?

Not in the places I keep an eye on - London E14 and St Albans.

Theres been ferk all knocked off the price of good places.

Crappy flats have dropped 10 to 15% but thats about it.

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Plenty of big reductions near me.

You can find some houses in Doncaster pit villages for under £50K and semis in average areas for well under £100K. A good 4 bed detached in a nice area could be had for under £200K and for £300K you could get something very nice in a very nice area.

It's a part of the country which is very hard hit by recession though.

Proportionally the biggest drops have been in the cheaper areas.

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£50k off wow!!! here in Boston Lincs detached have dropped maybe £15k eg. 4 bed £199k now £185k. by contrast at the lower end of the market semi's and terraced have dropped maybe £20-25k :blink: . i think people in detached houses are under less pressure to sell, so are digging in with the attitude if it doesnt sell for that ill stay where i am. strangley there were quite alot of detached properties with sold on them a couple of months ago, but not many semi's or terraced. maybe people with money decided to spend a bit more and buy a detached?

It's not that normal down this way but they were flying a kite in the first place and thats my point - peak was completely made up. An estate agent looked at the price of a 3 bed semi(hove) - 6 months prior to the peak and that was ~£250k then said lets try it at £360k asking - actual sale low £300ks and that it is just one example I know of.

Again its not any kind of a drop that say £360k to £310k It was overinflated the 6 months before at the £250k for ordinary people to be able to 'afford'.

For this particular semi

The £360k - ~£310k wasnt a crash it was flying a kite.

The £310k to previous years £250k wasnt a crash as that was just the sheer weight of credit available.

It would have to halve from peak asking to be anywhere near affordable. Then unemployment or reduced circumstances, such as no second job or less days or partner not working etc.. + lack of credit has to affect prices.

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It would have to halve from peak asking to be anywhere near affordable. Then unemployment or reduced circumstances, such as no second job or less days or partner not working etc.. + lack of credit has to affect prices.

Prices won't drop much, at the moment. The problem is that there is still fat too much cheap money around...we can thank BOE for this with their QE. At the behest of GB...

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The number of properties for sale at estate agents are at record lows-how long can potential sellers hold out- I would suggest many will have to move because time waits for no man or women. here are some reasons why:

How long before the people chosing not to sell, just cannot wait any longer- the rising unemployment The OECD (june 24th) said the rate of unemployment is expected to grow to 9.7 per cent in 2010 (currently 7.6%), double that seen just five years before, although this is still lower than other countries. The Office for National Statistics has today revealed that UK unemployment rose by 281,000 in the three months to May - the biggest quarterly rise on record.

The average first-time buyer deposit is now 25% according to the CML and the typical first-time buyer income multiple has held at 2.97 times income since April 2009.

The Average first time buyers salary is £33,500 and 80% of FTB under 30 receive help from family or friend with the deposit. The average deposit for those with family help is £35,000 and those that get no help £7,500.

If you’re looking for a buy to let mortgage in 2009 you’d better have a deposit of around 25% to be in with any chance of getting your loan approved, plus the fees levied on arranging the deal, can be extortionate.

In addition to a larger deposit because banks view buy-to-let borrowers as riskier than normal customers, banks have increased the minimum level of rents they require landlords to charge from 112% of their mortgage payment to 123% of it.

The problems faced by novice landlords have been made worse by a flood of rental properties coming on to the market, after people who were unable to sell their home decided to rent it out. The big increase in supply has outstripped rises in demand, leading to average rents falling from £873 a year ago to £819 now

Existing Buy to Let investors are losing their hard-earned properties at three times the rate of other home owners. Figures for repossessions released in June 2009 by the Council of Mortgage Lenders highlighted the fact that 1700 buy-to-let landlords had to deal with the stress of having their properties repossessed in just the first three months of 2009. A further 4,100 properties were lost when landlords failed to pay the mortgage on properties that they owned, and a receiver of rent had to be appointed.

Unemployment in the UK is at its highest level since 1995 with 2.38 million people out of work - 7.6% of the adult population - the biggest quarterly change since 1971.

The Office for National Statistics has today revealed that UK unemployment rose by 281,000 in the three months to May - the biggest quarterly rise on record.

The 4 x D's

1. Divorce: 57% of British households consisted of a married or cohabiting heterosexual couple in 2006.

If current divorce rates continue around 45 per cent of marriages will end in divorce, ...

There were 144,000 divorces in 2007 and marriage rates in England and Wales have fallen to the lowest level since records began.

2. Debt: April 2008 Almost a third of pensioners have moved when they had not intended to - searching out a smaller property to beat higher living costs. According to insurer Saga, some 37% of people have not been able to afford their retirement plans and 38% have found that their financial situation in retirement is worse than they had anticipated and have moved purely to reduce their cost of living. Over 70% of the over 60s now own their property 13,262,256 people were over 60in 2007 or 19% of population. Add to this houses repossessed, people forced to sell through debt etc.

3. Death- 234,000 in England and Wales 2008 - 65% over 45yrs many will have houses to be sold.

4. Desperation- add to this relocation due to job loss, to be nearer family, a lot of people bought for investment but want to move elsewhere.

If property sellers increase- prices go down automatically logic says, what do you think?

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Prices won't drop much, at the moment. The problem is that there is still fat too much cheap money around...we can thank BOE for this with their QE. At the behest of GB...

I think there are some cash rich people that will jump in and buy when prices seem cheap. Cheap is relative though - cheap to peak or cheap to the year 2001 that is the quesiton.

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