So, What Now For Welsh House Prices

[Swansea Estate Agent]

Like your new site, much better than the old one. I always thought you were in the Marina.

Lots of luck.

Cheers.

The old site was made from my ideas

[The Masked Tulip]

Was looking at a house just come on the market in the Mayals for 400K asking price, LR shows it last sold in Dec 2006 for 250K.

[The Masked Tulip]

House in Newton just come on the market - last house, identical, in the road sold for 280K back in April but this 'new' house is now listed at circa 370K.

It only sold a few years ago for 250K.

Same EA as the Mayals' house.

Edited June 7, 2010 by The Masked Tulip

[Swansea Estate Agent]

Was looking at a house just come on the market in the Mayals for 400K asking price, LR shows it last sold in Dec 2006 for 250K.

Value probably rose to 300k at it's peak and if you take off 10%, then it should be valued around £270k now unless some work has been carried out. For an extra £130k I assume a lot of work was done or somebody got the value very wrong.

Values dropped by 15%, but judging by what some articles in the papers say the prices have risen almost each month this year, so I suppose that may suggest value's are around 10% less than they was 3 years ago.

Edited June 7, 2010 by SwanseaPropertyAgents

[Swansea Estate Agent]

House in Newton just come on the market - last house, identical, in the road sold for 280K back in April but this 'new' house is now listed at circa 370K.

It only sold a few years ago for 250K.

Same EA as the Mayals' house.

Maybe somebody is selling their mates properties

[The Masked Tulip]

To be frank, looking at most of the asking prices in Swansea it is as if, when house price falls were being reported in the press, none of the falls were added to prices - they just stayed at 2007 height...

But now that there are, some, reports of price rises they are adding on the price rises.

To be frank, at this level and this amount of greed, I am not too bothered about buying in Swansea. My career will shortly take me around the World so I am quickly losing interest in Swansea and Swansea house prices - but I will keep an eye out for purely personal curiousity once the job cuts begin and Swansea reverts to circa 1980s... people who were not here in Swansea in the 1980s have no idea how miserable this part of the World became.

[The Masked Tulip]

Maybe somebody is selling their mates properties

Went into said EAs today, asked them why these houses werre 150K more than just a few years ago at the height of the bubble - answer I got was those parts of Swansea had ocnstantly rising prices.

I said that 55% rise in 2 - 3 years was a joke, was someone trying it on and that it was taking the proverbial.

They looked pretty miffed.

Overheard one EA telling another that it was "time to look elsewhere", "time to get out" as "it is so bad things cannot go on like this much longer" so whether that is poor sales or bullying or poor wages or what I don't know.

Perhaps they should value houses realistically?

[Swansea Estate Agent]

Perhaps they should value houses realistically?

Depends who it is that puts the value on the property.

Likely to be the sales negotiator and the others are responsible for viewings and selling. If somebody is putting to high a value on properties, then there will be no commission for the others, so I assume it is wages that is the problem. That combined with targets that are unachievable with over-priced properties will make the job impossible.

Like you say they should value correctly. Having said that many vendors will only sell at a certain price mainly because they have got greedy themselves and re-mortgaged when values rose.

I spoke with 2 different vendors yesterday that have properties on the market with 2 of the big agents and both had the same problem. It would appear the EA's are no longer negotiating on their behalf. Just simply getting an offer and saying that's the offer, take it or leave it. Obviously trying to get sales pushed through.

Not only that, but commission fees seem to have risen. One of them is selling a property for £65,000 and the commission is £1,900 + VAT which is almost 3%. That is a reduced rate has the vendor has sold bought and sold dozens of properties with the same agent for years. He was gutted when I said we charge 1% yet he is a landlord of mine and for some reason did not know that we dealt with sales.

[The Masked Tulip]

Depends who it is that puts the value on the property.

Likely to be the sales negotiator and the others are responsible for viewings and selling. If somebody is putting to high a value on properties, then there will be no commission for the others, so I assume it is wages that is the problem. That combined with targets that are unachievable with over-priced properties will make the job impossible.

Like you say they should value correctly. Having said that many vendors will only sell at a certain price mainly because they have got greedy themselves and re-mortgaged when values rose.

I spoke with 2 different vendors yesterday that have properties on the market with 2 of the big agents and both had the same problem. It would appear the EA's are no longer negotiating on their behalf. Just simply getting an offer and saying that's the offer, take it or leave it. Obviously trying to get sales pushed through.

Not only that, but commission fees seem to have risen. One of them is selling a property for £65,000 and the commission is £1,900 + VAT which is almost 3%. That is a reduced rate has the vendor has sold bought and sold dozens of properties with the same agent for years. He was gutted when I said we charge 1% yet he is a landlord of mine and for some reason did not know that we dealt with sales.

Interesting - not the first time you have mentioned the re-mortgaging and now vendors wanting 'that' particular price no matter what.

I wonder just how widespread this is in Swansea and just how much debt many vendors are in? I suspect, knowing Swansea history, that a sizeable number have got well over their heads when they thought that house prices could only rise.

For all we know there could be a large number of vendors hanging on by their teeth hoping that IRs do not rise and that a mug comes along soon.

Also interesting to hear the comments about EAs just passing on prices to vendors now which kind of indicates that things are not as rosy as they make out.

[gus]

Interesting - not the first time you have mentioned the re-mortgaging and now vendors wanting 'that' particular price no matter what.

I wonder just how widespread this is in Swansea and just how much debt many vendors are in? I suspect, knowing Swansea history, that a sizeable number have got well over their heads when they thought that house prices could only rise.

For all we know there could be a large number of vendors hanging on by their teeth hoping that IRs do not rise and that a mug comes along soon.

Also interesting to hear the comments about EAs just passing on prices to vendors now which kind of indicates that things are not as rosy as they make out.

Hanging on by their teeth.... and they are legion.

Nephew I'd not seen for 20yrs now lives in mid-Wales with his girl friend and I met them last month.Seems to be doing pretty well ; has a good job and living in a 4 bed detached, two cars in the driveway etc....

So we're sitting talking about the economy and other crap when I say how peed-off I am that my hard earned in the bank is earning nothing ,but that will soon change as inflation picks up so rates will have to follow.

Suddenly silence, followed by nervous glances between him and GF . Then she matter of factly announces that any rate rise will "finish them off". Seems they can just about keep their head above water as things stand, but a return to "normal" rates and they are dead in the water.

There are many millions out there right now, just like them . Overstretched ,overextended and with nimble footwork just about managing to hold it together.

Needless to say , changed the subject as soon as I could!!

[Swansea Estate Agent]

Hanging on by their teeth.... and they are legion.

Nephew I'd not seen for 20yrs now lives in mid-Wales with his girl friend and I met them last month.Seems to be doing pretty well ; has a good job and living in a 4 bed detached, two cars in the driveway etc....

So we're sitting talking about the economy and other crap when I say how peed-off I am that my hard earned in the bank is earning nothing ,but that will soon change as inflation picks up so rates will have to follow.

Suddenly silence, followed by nervous glances between him and GF . Then she matter of factly announces that any rate rise will "finish them off". Seems they can just about keep their head above water as things stand, but a return to "normal" rates and they are dead in the water.

There are many millions out there right now, just like them . Overstretched ,overextended and with nimble footwork just about managing to hold it together.

Needless to say , changed the subject as soon as I could!!

Quite right. There are many out there that found it easy to re-mortgage or borrow cash a few years ago and are on borrowed time now simply because banks/lenders were just chasing everybody with equity to get rid of money from the bank vaults and tie them down for as long as possible. This along with silly house prices that not only did EA's ramp up, but also the banks and surveyors has left so many people on dodgy ground.

One of the main reasons the interest rates were cut was to prevent repo's etc. Problem is how many people that were on the edge, but have now had a lifeline foe a while have saved up the money from reduced mortgage rates to cover them for when the rates rise? I would suggest it is very few because most people will have just used the spare cash to upgrade cars or continue with lavish holidays.

[gus]

Quite right. There are many out there that found it easy to re-mortgage or borrow cash a few years ago and are on borrowed time now simply because banks/lenders were just chasing everybody with equity to get rid of money from the bank vaults and tie them down for as long as possible. This along with silly house prices that not only did EA's ramp up, but also the banks and surveyors has left so many people on dodgy ground.

One of the main reasons the interest rates were cut was to prevent repo's etc. Problem is how many people that were on the edge, but have now had a lifeline foe a while have saved up the money from reduced mortgage rates to cover them for when the rates rise? I would suggest it is very few because most people will have just used the spare cash to upgrade cars or continue with lavish holidays.

Well I was surprised because this lad works in a fairly specialised field and has just returned from, I assume, lucrative foreign contract work undertaken over the last few years. And they have no kids. So if a couple like this are still living on the edge (and from what I could see they were certainly not conspicuously extravagant)then what does it say about the position of so many others with the obligatory two or three kids in tow ?

Mix into the brew his or her job disappearing, combined with a minor rate rise and we have our nightmare .

The social costs of this shameful national scam will be appalling. Brown and balls and piano wire spring to mind as a starter.

[The Masked Tulip]

I think this is why they are determined to keep IRs at zero - any rise in rates will destroy the housing market which will mean the banks making huge losses which will mean then going bust or more bail-outs.

The greedy sods may well get away with it.

[The Masked Tulip]

I am almost lost for words... I looked at a dozen houses today which, in late 2006 to 2007, were sold for 250K - LR figures. Today, all of them are on the market with an asking price of 399K. The difference in asking price is simply ludicrous!

I pointed out to the EAs today what the LR figures were for these houses when they last sold and they basically looked at me as if I was stupid for even challenging the asking prices. It is like a disease or some kind of brain-washing... or Invasion of the Body Snatchers.

A house near me, which has been on the market for 300K and which just got reduced to 275K asking price, is, at best, worth 250K in current prices... so when I mentioned to the EA that that is what it should go for I was told that it was worth much more than that... and was dismissed as a potential buyer for even challenging the price. I mean, a 25K reduction on a 275K asking price is not even 10% which would equate to 90% of asking price.

I am completely lost for what I personally see as the arrogance and stupidity of my fellow Swansea people.

Perhaps it is something in the water.

[Swansea Estate Agent]

Perhaps it is something in the water.

Or something in the air. Ash clowd perhaps

I have done 4 valuations this week and the vendors all opted for valuations from 3 EA's with them all being the same 3 EA's.

Before I go to a valuation I usually spend about a hour depending on how much information I can get hold of searching on-line and through archives to have a valuation in mind before I get there, then alter that depending on condition and the properties nearby.

In each case one of the EA's over-valued IMO by about 15% yet the other one under-valued by 20%.

The EA under-valuing them is one of the major EA's around here and South Wales. I assume due to market conditions they are trying to turn property over fast to hit their targets. Ok their commissions will be smaller, but they will probably sell more to make up. The other EA IMO does not know Swansea well enough yet and should have probably stayed in Brecon.

Funny thing is all the vendors are in similar positions where they have had the property passed down to them, so don't need to sell, but obviously want to do for their inheritance. Taking this in to account over-valueing will probably gain the instruction and with no rush to sell they are likely to not be too bothered about a lack of interest until they need some cash. Under-valueing is the obvious way to get the vendors some very fast money, but not as much as they should be getting. They have all said that they are now left in limbo due to the gulf in price difference has they believed they could listen to EA's for sound advice. I am hoping that they will see the reasons behind the difference in valuations and opt for an asking price to be at the market value with offers seriously considered.

I will no doubt find out what they do want from a sale shortly. Whether it is fast money, greed or sense.

Edited June 16, 2010 by SwanseaPropertyAgents

[gus]

I am almost lost for words... I looked at a dozen houses today which, in late 2006 to 2007, were sold for 250K - LR figures. Today, all of them are on the market with an asking price of 399K. The difference in asking price is simply ludicrous!

I pointed out to the EAs today what the LR figures were for these houses when they last sold and they basically looked at me as if I was stupid for even challenging the asking prices. It is like a disease or some kind of brain-washing... or Invasion of the Body Snatchers.

A house near me, which has been on the market for 300K and which just got reduced to 275K asking price, is, at best, worth 250K in current prices... so when I mentioned to the EA that that is what it should go for I was told that it was worth much more than that... and was dismissed as a potential buyer for even challenging the price. I mean, a 25K reduction on a 275K asking price is not even 10% which would equate to 90% of asking price.

I am completely lost for what I personally see as the arrogance and stupidity of my fellow Swansea people.

Perhaps it is something in the water.

It's greed pure and simple.

I very recently offered 70% on a property in west S'x that started off originally in excess of 700. It was rejected by the agent saying, "we are looking at offers in excess of....... ". I laughed aloud and reminded them that my offer was not for negotiation purposes , but was a "take it or leave it figure" and I would stand by it for a short time only, should the vendor wish to change his mind.

These chancers had better wake up to the fact that the balance of power is changing but fast.

When I looked again at the aerial photos of the place I realised that the adjacent property had been built in the original gardens of the house I'm interested in. The vendors have already partially asset-stripped the place and still want top Dollar!!

Don't know about you, but I find it's becoming increasingly difficult to maintain a civil tongue in my head when dealing with these toe rags.

[The Masked Tulip]

Don't know about you, but I find it's becoming increasingly difficult to maintain a civil tongue in my head when dealing with these toe rags.

Yes, ditto.

[The Masked Tulip]

It's greed pure and simple.

I very recently offered 70% on a property in west S'x that started off originally in excess of 700. It was rejected by the agent saying, "we are looking at offers in excess of....... ". I laughed aloud and reminded them that my offer was not for negotiation purposes , but was a "take it or leave it figure" and I would stand by it for a short time only, should the vendor wish to change his mind.

These chancers had better wake up to the fact that the balance of power is changing but fast.

When I looked again at the aerial photos of the place I realised that the adjacent property had been built in the original gardens of the house I'm interested in. The vendors have already partially asset-stripped the place and still want top Dollar!!

Don't know about you, but I find it's becoming increasingly difficult to maintain a civil tongue in my head when dealing with these toe rags.

I have begun looking around my contacts for work again and that inevitably is going to be far away from Swansea.

Some of it could be working from home but I am increasingly trying to reconcile why I should pay asking prices, or anywhere near, in Swansea - which is on the precipice of a public sector massacre - and end up with long commutes whilst there are better and cheaper properties in the gap between here and where the money is - South East.

Mal Volio posted some links to some gorgeous properties in Monmouthshire which are far more reasonable than the S'sea shoeboxs.

[gus]

I have begun looking around my contacts for work again and that inevitably is going to be far away from Swansea.

Some of it could be working from home but I am increasingly trying to reconcile why I should pay asking prices, or anywhere near, in Swansea - which is on the precipice of a public sector massacre - and end up with long commutes whilst there are better and cheaper properties in the gap between here and where the money is - South East.

Mal Volio posted some links to some gorgeous properties in Monmouthshire which are far more reasonable than the S'sea shoeboxs.

Shoe boxes built on postage stamps. I really don't want to pay 500k just to have my neighbour looking at the whites of my eyes whilst I wash the dishes, wander around in the nick and take a leak.

Last time I trawled around Langland/Caswell I was amazed to see so many houses obviously built in sold-off gardens and within spitting distance of each other.

People really are unbelievably stupid!! Why, oh why ,would anyone pay over 500k for a house which is closely overlooked on three sides by neighbours and just to have the right postal address?

I urgently need to move to an island populated only by animals and birds! Know anywhere going cheap?

[gus]

Or something in the air. Ash clowd perhaps

I have done 4 valuations this week and the vendors all opted for valuations from 3 EA's with them all being the same 3 EA's.

Before I go to a valuation I usually spend about a hour depending on how much information I can get hold of searching on-line and through archives to have a valuation in mind before I get there, then alter that depending on condition and the properties nearby.

In each case one of the EA's over-valued IMO by about 15% yet the other one under-valued by 20%.

The EA under-valuing them is one of the major EA's around here and South Wales. I assume due to market conditions they are trying to turn property over fast to hit their targets. Ok their commissions will be smaller, but they will probably sell more to make up. The other EA IMO does not know Swansea well enough yet and should have probably stayed in Brecon.

Funny thing is all the vendors are in similar positions where they have had the property passed down to them, so don't need to sell, but obviously want to do for their inheritance. Taking this in to account over-valueing will probably gain the instruction and with no rush to sell they are likely to not be too bothered about a lack of interest until they need some cash. Under-valueing is the obvious way to get the vendors some very fast money, but not as much as they should be getting. They have all said that they are now left in limbo due to the gulf in price difference has they believed they could listen to EA's for sound advice. I am hoping that they will see the reasons behind the difference in valuations and opt for an asking price to be at the market value with offers seriously considered.

I will no doubt find out what they do want from a sale shortly. Whether it is fast money, greed or sense.

SPA. Like to pick your brains. What are the advantages or disadvantages to letting property furnished or unfurnished? I recall something about legal distinctions related to ejecting tenants but I'm hazy.

Is there more demand in S'x for furnished or unfurnished ? Do upmarket props. tend more often to be let unfurnished?

And last but not least what % do agents charge to manage let property? Oh, and what do you charge for managing tenanted property?

[Swansea Estate Agent]

SPA. Like to pick your brains. What are the advantages or disadvantages to letting property furnished or unfurnished? I recall something about legal distinctions related to ejecting tenants but I'm hazy.

Is there more demand in S'x for furnished or unfurnished ? Do upmarket props. tend more often to be let unfurnished?

And last but not least what % do agents charge to manage let property? Oh, and what do you charge for managing tenanted property?

I would say the only advantage of letting a furnished property is that you can receive more rent, but you do have the problem of replacing the furniture.

Hard to say with regards to demand. It's probably an even split between un-furnished, part-furnished and fully furnished.

Ideally a landlord is flexible and is prepared to offer either, but that is only to help let the property much quicker. Similar answer for all types of properties.

I would suggest that if a property is un-furnished a tenant is likely to stick around longer unless of course they are only here for a work contract for about 12 months. Doctors and the like usually come to Swansea for a year or two and prefer furnished properties, but they need to be within 10 minutes drive of the hospital. Microsoft contractors for the DVLA are in the same situation, but on 6 month contracts and they usually have their work contracts extended at the last minute, so usually delay in extending tenancies.

Most agents charge similar and offer pretty much the same, but whether or not they fulfill their offers is a different matter. The last time I checked most agents charged 12.5% for full management with some charging 10%.

Although I find it a strange service we also offer it because everybody else does and that is rent collection management which is usually around 8%. Most student landlords go for this due to agents not doing inspections when they are fully manageing properties. Students are the ones that you need to put more time and effort in to avoid a lot of work each year when they leave. If you stay on top of them with regular contact and visits, then they leave the property in good order preventing large costs to have it ready for the next tenants.

We have 4 levels of letting services.

Let only. Simply tenant a property - £250 deducted from the first rent we collect.

Rent collection. The same plus rent collection each month - 8%

Full management - 10% which includes 6 month rent guarantee.

Management plus - 12% as above with 12 months rent guarantee.

There is a long list of what each service does include, but I have just provided the fees. We can give rent guarantee's with all services, but at a cost depending on what is required. This covers everything including legal costs etc. and will pay out as long as it takes to evict the tenant or have them clear their arrears.

The way things are at the moment with job losses etc. I strongly recommend having rents guaranteed in this way and I am surprised at the lack of agents offering this service.

[Swansea Estate Agent]

Just to add.

I'm not sure if I answered you correctly has I just noticed you asked for fees on tenanted property.

We do not charge anything if the property is already tenanted other than the monthly management fee. Rent can not be guaranteed unless the tenant is prepared to sign a new tenancy with us and pass the credit and referencing.

The charges are as above, but we always negotiate on prices especially if there is more than one property.

[gus]

I would say the only advantage of letting a furnished property is that you can receive more rent, but you do have the problem of replacing the furniture.

Hard to say with regards to demand. It's probably an even split between un-furnished, part-furnished and fully furnished.

Ideally a landlord is flexible and is prepared to offer either, but that is only to help let the property much quicker. Similar answer for all types of properties.

I would suggest that if a property is un-furnished a tenant is likely to stick around longer unless of course they are only here for a work contract for about 12 months. Doctors and the like usually come to Swansea for a year or two and prefer furnished properties, but they need to be within 10 minutes drive of the hospital. Microsoft contractors for the DVLA are in the same situation, but on 6 month contracts and they usually have their work contracts extended at the last minute, so usually delay in extending tenancies.

Most agents charge similar and offer pretty much the same, but whether or not they fulfill their offers is a different matter. The last time I checked most agents charged 12.5% for full management with some charging 10%.

Although I find it a strange service we also offer it because everybody else does and that is rent collection management which is usually around 8%. Most student landlords go for this due to agents not doing inspections when they are fully manageing properties. Students are the ones that you need to put more time and effort in to avoid a lot of work each year when they leave. If you stay on top of them with regular contact and visits, then they leave the property in good order preventing large costs to have it ready for the next tenants.

We have 4 levels of letting services.

Let only. Simply tenant a property - £250 deducted from the first rent we collect.

Rent collection. The same plus rent collection each month - 8%

Full management - 10% which includes 6 month rent guarantee.

Management plus - 12% as above with 12 months rent guarantee.

There is a long list of what each service does include, but I have just provided the fees. We can give rent guarantee's with all services, but at a cost depending on what is required. This covers everything including legal costs etc. and will pay out as long as it takes to evict the tenant or have them clear their arrears.

The way things are at the moment with job losses etc. I strongly recommend having rents guaranteed in this way and I am surprised at the lack of agents offering this service.

Thanks for the info very useful. So under Full Man: Rent of 400 PM = 4800 PA @ 10% = Fee of 480 (Correct?)

Never thought I'd say it (looks over his shoulder) but with miniscule rate increases on the horizon for the forseeable future this might finally be worth considering.... on a toe-dipping scale. 3 bed semi on in Eastlands Pk for 215K now if I could get that for 150K be perfect for letting.... (Runs for cover!!!)

Moral stances are fine and dandy until the rule book is torn up by the opposition; sadly Queensbury vs. steel-capped boots assures you end up in the gutter.

[Swansea Estate Agent]

Thanks for the info very useful. So under Full Man: Rent of 400 PM = 4800 PA @ 10% = Fee of 480 (Correct?)

Never thought I'd say it (looks over his shoulder) but with miniscule rate increases on the horizon for the forseeable future this might finally be worth considering.... on a toe-dipping scale. 3 bed semi on in Eastlands Pk for 215K now if I could get that for 150K be perfect for letting.... (Runs for cover!!!)

Moral stances are fine and dandy until the rule book is torn up by the opposition; sadly Queensbury vs. steel-capped boots assures you end up in the gutter.

Your sums are correct

We don't charge VAT currently, but that may need to change further down the line which would mean 10% + VAT. I believe all other agents currently charge their percentage and then add VAT.

There is also an investment deal that we are putting in place which is currently being successfully tested in the South West of England by a company that we are linked with. This is to help reduce risk and make it easier for people wanting to invest in property. It will also help to improve the standard of many properties locally which will benefit those nearby. I don't have the full details of this currently, but I believe from the testing so far it will go down a storm not just locally, but nationally.

Before anybody jumps down my throat for encouraging investors to buy up property and let them out please hold off for now

This is not designed for large investors although they are welcome to become involved on a more individual basis. The main idea is to improve the condition of properties and give people something better to invest their money in rather than failed pensions and/or banks.

[Mal Volio]

Mal Volio posted some links to some gorgeous properties in Monmouthshire which are far more reasonable than the S'sea shoeboxs.

I also observed that asking prices in Monmouthshire seemed to be pretty comparable with Surrey - and that none of them are selling