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Property Is Pouring Onto The Market


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I use the number of 'reduced price' banners on property ads in the local paper as a rough guide. This week there were 11, which is higher than it's been for a long time. A few weeks ago there were none.

Locally, lots of properties have come on the market recently and they don't seem to be selling quickly. Large luxury properties still seem to be in a boom of their own, leaving everything else behind. Is this repeated elsewhere?

Edited by blankster
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Not long now.

Agreed - 'smarter' people who have nevertheless overborrowed will start to panic from June 22.

The bumbrains will wake up when England goes out of the World Cup, probably July 4.

Popcorn ready, waiting for the chorus of "I'm going to lose my house - what are they going to do about it".

Aah the mythical they. What is this mass delusion amongst the less bright that there is some unnamed body monitoring their lives ready to step in when they f*ck up?

Tick tock.

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The only thing that will cause more people to HAVE to sell is a sharp rise in interest rates, causing people to fall into serious mortgage arrears.

Unless and until this happens, I can't see many sellers drastically dropping their prices.

Fear of loss may also convince them they HAVE to sell? Interest rates are just one of many negative straws battering the camels back now IMO.

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Agreed - 'smarter' people who have nevertheless overborrowed will start to panic from June 22.

The bumbrains will wake up when England goes out of the World Cup, probably July 4.

Popcorn ready, waiting for the chorus of "I'm going to lose my house - what are they going to do about it".

Aah the mythical they. What is this mass delusion amongst the less bright that there is some unnamed body monitoring their lives ready to step in when they f*ck up?

Tick tock.

Agree with all that, yes, budget will be a shocker for many I think.

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Fear of loss may also convince them they HAVE to sell? Interest rates are just one of many negative straws battering the camels back now IMO.

People will not want to crystalise a big loss - maybe putting themselves in or near negative equity - unless they are forced to by loss of job or rising rates.

They would rather keep their home and keep paying the mortgage.

Rising unemployment will also cause a rise in "forced sellers" but not that many.

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People will not want to crystalise a big loss - maybe putting themselves in or near negative equity - unless they are forced to by loss of job or rising rates.

They would rather keep their home and keep paying the mortgage.

Rising unemployment will also cause a rise in "forced sellers" but not that many.

300,000 were helped by the last Socialist Government..at last claim.

probably nearer 400,000 now...

and you think forced sellers will be in short supply.

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Just been to some EAs in Swansea - yep, pouring on the market here also.

Quite a lot of, um, 'investment' properties coming up for sale with loads of photos of furniture-free houses for sale.

Some interesting price drops also - two houses that I took my interest have dropped by 25K asking price from 300K to 275K. One owner might be prepared to go to 260K apparently but, as I pointed out, that was over the 250K stamp duty threshold.

Also, interestingly, the below property in the Mumbles has had its guide price reduced for an upcoming auction. Similar properties in the area had been snapped up in recent years, gutted, converted into 2 or 3 'appartments' and then put on the market.

I wonder if dropping the guide price for auction is a sign of lack of interest? I know some of the similar modernised 'appartments' in the area have not sold.

http://www.rightmove.co.uk/property-for-sale/property-30184502.html

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Just been to some EAs in Swansea - yep, pouring on the market here also.

Quite a lot of, um, 'investment' properties coming up for sale with loads of photos of furniture-free houses for sale.

Some interesting price drops also - two houses that I took my interest have dropped by 25K asking price from 300K to 275K. One owner might be prepared to go to 260K apparently but, as I pointed out, that was over the 250K stamp duty threshold.

Also, interestingly, the below property in the Mumbles has had its guide price reduced for an upcoming auction. Similar properties in the area had been snapped up in recent years, gutted, converted into 2 or 3 'appartments' and then put on the market.

I wonder if dropping the guide price for auction is a sign of lack of interest? I know some of the similar modernised 'appartments' in the area have not sold.

http://www.rightmove.co.uk/property-for-sale/property-30184502.html

Is that a doss house?

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Is that a doss house?

Yes, looks like it - the blurb says it has a HMO licence for, what was it, 12 or 15.

It is in a nice, sought-after area oddly enough but obviously needs to be gutted and I guess the auction price plus the cost of doing the work would mean it makes sense to buy any one of 50 houses for say within a mile radius with better views and which, IMPO, are much, much nicer.

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People will not want to crystalise a big loss - maybe putting themselves in or near negative equity - unless they are forced to by loss of job or rising rates.

They would rather keep their home and keep paying the mortgage.

Astonishingly I'm still hearing of people who are holding on to houses because they are waiting for prices to recover! It reminds me of people who stayed on the Titanic as it seemed safer than the lifeboats.

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@kingsgate:

your spot on. why the rest of the poeple on here dont get it i dont know. no HPC till people are winkled out of there houses buy high ir's or job loss. why leave a house at a loss?

@OP:

no increase in "GOOD" properties in my area, Boston Lincs. if anything ive seen a fall, and subsiquent increase in asking prices back to 2007 levels.

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@kingsgate:

your spot on. why the rest of the poeple on here dont get it i dont know. no HPC till people are winkled out of there houses buy high ir's or job loss. why leave a house at a loss?

@OP:

no increase in "GOOD" properties in my area, Boston Lincs. if anything ive seen a fall, and subsiquent increase in asking prices back to 2007 levels.

please, the rest of the people on here do get it. debt, divorce and death are the main other reasons.

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Astonishingly I'm still hearing of people who are holding on to houses because they are waiting for prices to recover! It reminds me of people who stayed on the Titanic as it seemed safer than the lifeboats.

Most surveys show 70 percent or so of people think prices will carry on going up.

As you know, the Titanic was unsinkable and they would never let it sink. So it didn't sink The footage of it sinking is made up. In fact the sinking was all a plot by left wingers to put up taxes. The planet makes Titanics they are not manufactured and certainly have nothing to do with the environment - there will be Titanics for the forseeable future. Anyone who says the Titanic sank is a paedophile Islamic terrorist socialist and a New Labour voter.

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Yes, looks like it - the blurb says it has a HMO licence for, what was it, 12 or 15.

It is in a nice, sought-after area oddly enough but obviously needs to be gutted and I guess the auction price plus the cost of doing the work would mean it makes sense to buy any one of 50 houses for say within a mile radius with better views and which, IMPO, are much, much nicer.

Could have been all sorts of things, really: student accommodation, old people's home, guest house, residential place for teenagers / young people on activity or similar trips.

You could convert it back for a few grand but often places with all the HMO / fire saftey stuff are worth more to someone else with a use hat requires the safety stuff. As you say there are loads of standard "residential" houses around, but not so many with all the elf'n'safety work already done....

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please, the rest of the people on here do get it. debt, divorce and death are the main other reasons.

Right, you are in a house, and you paid £200K for it with a £180K loan, and you can now see houses in your road going for £150K.

If you sell you now have no home, no money and a bank chasing you for their loss. Zero chance of buying anywhere else.

While rates are low and you have a job, you can easily afford the mortgage each month.

Why sell and make yourself homeless? You can't pay the £30K loss at all. If your house drops another £50K you won't be able to pay the bank back the £80K either. YOu might have to go bankrupt.

Why bring this on yourself if you do not have to?

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Right, you are in a house, and you paid £200K for it with a £180K loan, and you can now see houses in your road going for £150K.

If you sell you now have no home, no money and a bank chasing you for their loss. Zero chance of buying anywhere else.

While rates are low and you have a job, you can easily afford the mortgage each month.

Why sell and make yourself homeless? You can't pay the £30K loss at all. If your house drops another £50K you won't be able to pay the bank back the £80K either. YOu might have to go bankrupt.

Why bring this on yourself if you do not have to?

There's a bit of circular thinking in your argument here.

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There's a bit of circular thinking in your argument here.

Not really, I am just pointing out that if you are already in NE, selling up only makes your life worse - you now have no house, no hope of getting another one, and a bank chasing you for the debt.

Why sell up in these circs?

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Not really, I am just pointing out that if you are already in NE, selling up only makes your life worse - you now have no house, no hope of getting another one, and a bank chasing you for the debt.

Why sell up in these circs?

While i agree with your sentiment what if any of these events occur?

Interest rates rise

your partner leaves

you have a child and the house isnt big enough

you lose your job

council tax goes bonkers

VAT goes up and you cant afford to buy anything

Your credit card decides it wants it money back

you come to the end of your fixed period 0.5% interest rate style and now have to pay 6% (which you dont have) or refix which you cant as you are in NE

(None of the you in this are "YOU", just clarifying, as last time i said you on here someone went mental thought i meant them instead of the proverbial you)

The list goes on, a lot of these people wont choose to sell they will effectively be forced.

But like i say, i do agree that while they can hang on they will

Edited by Rozza
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With interest rates so low many households are actually better off in cash-flow terms that two or three years ago. So you need either higher IRs or a fairly significant increase in unemployment levels (or wage cuts). You're not going to get significantly higher interest rates since the BoE will keep rates low for long in return for "fiscal austerity" from the governement ... that's the deal. So to bring those households in negative equity to market as forced sellers you're relying on two things: significant wage cuts or retrenchment and no savings to allow the owner to ride out the NE period.

The major job cuts / wage cuts are going to hit hardest where the public sector is large. A lack of savings is most likely for younger buyers (FTBs for example) and in poorer regions of the country. So basically the cheap houses are going to get hit harder than expensive ones. Where you have cash rich owners, foreigners or baby boomers on second or third houses etc you're aren't going to see any forced sellers.

So I think we should expect price differentials between starter homes and 4/5 bed detached houses too widen. Similarly price differential between richer (London/SE) and poorer areas (NE/Scotland) will also widen even further. In poorer areas we probably get more supply at the low end of the market forcing prices down but with decent sales volumes. In richer areas supply will be non-existant, especially at the top-end, since nobody will need to sell for a loss. Good houses will go for more than peak prices, mediocre houses just dont' sell and the price never comes down. Transaction volumes in better-off areas will simply collapse.

Lokking at SW London and Surrey over the past year that's exactly what is happening.

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Just been to some EAs in Swansea - yep, pouring on the market here also.

The hpc seems to be slowly creeping towards your area Tulip.

Take a look at this report from another thread,

http://www.acadametrics.co.uk/AcadHPI%20News%20Release%20April%2010.pdf

And note that the largest Average annual drops over the last 3 months, come from some of your close, but probably less desirable neighbouring areas. (see Page 7, the "Average Annual change over 3 months - Counties"...eg..Merthyr Tydfil -4.1, Pemrbokeshire -4.8, Bridgend -6.4, Carmarthenshire -7.0. ).

I think, as another hpc'er suggested to me, that as prices in the less desirable areas decrease, the more desirable areas follow later, because the price differential becomes too great to substain. I think that makes sense.

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In richer areas supply will be non-existant, especially at the top-end, since nobody will need to sell for a loss. Good houses will go for more than peak prices, mediocre houses just dont' sell and the price never comes down. Transaction volumes in better-off areas will simply collapse.

You might be right, im not so convinced, a lot of the top-end house "owners" are fully (and i mean fully) leveraged up to the hilt, their purchases relied on bonuses/consistent business turnover/etc and when that isnt forthcoming the crunch bites, i know quite a few people who have properties worth in excess of 1 million and all of them are in exactly the same situation cash wise as normal people, because when their salary was clearing 250k they didnt do as you would think and pay it off the house, they instead bought 2 new cars and went to bermuda 3 times.

The way i see it is this, if your mortgage is 600 a month and you lose your job and get in trouble you could do whatever is needed e.g work in tescos, do 5 cleaning jobs (not to demean these jobs) to scrape it together. When your mortgage is 4.5k a month or 8 times a massive salary requiring a bonus pay off to keep you afloat where do you get it from when in trouble?

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With interest rates so low many households are actually better off in cash-flow terms that two or three years ago. So you need either higher IRs or a fairly significant increase in unemployment levels (or wage cuts). You're not going to get significantly higher interest rates since the BoE will keep rates low for long in return for "fiscal austerity" from the governement ... that's the deal. So to bring those households in negative equity to market as forced sellers you're relying on two things: significant wage cuts or retrenchment and no savings to allow the owner to ride out the NE period.

The major job cuts / wage cuts are going to hit hardest where the public sector is large. A lack of savings is most likely for younger buyers (FTBs for example) and in poorer regions of the country. So basically the cheap houses are going to get hit harder than expensive ones. Where you have cash rich owners, foreigners or baby boomers on second or third houses etc you're aren't going to see any forced sellers.

So I think we should expect price differentials between starter homes and 4/5 bed detached houses too widen. Similarly price differential between richer (London/SE) and poorer areas (NE/Scotland) will also widen even further. In poorer areas we probably get more supply at the low end of the market forcing prices down but with decent sales volumes. In richer areas supply will be non-existant, especially at the top-end, since nobody will need to sell for a loss. Good houses will go for more than peak prices, mediocre houses just dont' sell and the price never comes down. Transaction volumes in better-off areas will simply collapse.

Lokking at SW London and Surrey over the past year that's exactly what

You don't remember 88/94 then everything came down London and the south east more than anywhere else as these areas had gone up the most .

Maybe with London now being a much more international city and money form across the world pouring in , it could be ring fenced and the better houses in the south east.

However acrooss the market bottom to the top there will be forced sales . Many boomers who bought 15-20 years back have remortgaged and have incereased their debts.

You will still have business people who's companys fail needing to sell, divorceing people , dead peoples houses, the ones that loose their jobs , the people who remortgaged and did a few BTL's .

Must admit im surprised that it has not already happend , but think it is brewing .

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People will not want to crystalise a big loss - maybe putting themselves in or near negative equity - unless they are forced to by loss of job or rising rates.

They would rather keep their home and keep paying the mortgage.

Rising unemployment will also cause a rise in "forced sellers" but not that many.

Sorry, I don`t agree, there is a point where servicing the loan just becomes pointless so to speak, this will admitedly apply mainly to urban style newbuild and stuff like that, but many bought into the idea of HPI, capital gains, rock solid guaranteed gains further down the road, when the penny drops that this can`t happen now, there will be a lot of people who want out at all costs and will use bankrupcy laws to do so, and I don`t think the new government is going to pay for hundreds of thousands of unemployed to stay in homes they bought at peak prices?

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