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Tired of Waiting

Supply Of Housing For Sale Rising 3 Times Faster Than Demand

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"The rising supply of housing for sale is now outstripping demand increases by three times,

with supply up 15 per cent in the past three months

compared with a mere 4.9 per cent increase in demand,

according to Hometrack."

http://www.independent.co.uk/news/business/news/uncertainty-puts-brake-on-property-prices-2012251.html

Uncertainty puts brake on property prices

By Sarah Arnott, Monday, 28 June 2010

House price gains are dropping back, under pressure from economic uncertainty and a growing mismatch between supply and demand, property analyst Hometrack will say today.

Prices rose by just 0.1 per cent in June, as new buyer registrations ground to a virtual standstill with a measly 0.1 per cent growth, while sales listings boomed by 2.9 per cent. The result is prices rising in a bare 11 per cent of the market. And in nearly 3 per cent of the market prices are falling.

Growth in demand has now been slowing for four consecutive months, with six out of 10 regions seeing a fall in new buyer registrations this month. The most significant drop was in London, where registrations fell by 0.9 per cent compared with May.

The rising supply of housing for sale is now outstripping demand increases by three times, with supply up 15 per cent in the past three months compared with a mere 4.9 per cent increase in demand, according to Hometrack.

Market sentiment has come under considerable pressure in recent months, first from the General Election and more recently over concerns about the future health of the economy, according to Richard Donnell, the director of research at Hometrack. A continuing lack of mortgage finance is also a factor. And last week's austere Emergency Budget will only add to the market's sense of uncertainty.

"The Election and Budget have highlighted the scale of the challenge facing the Government in balancing the public finances against individuals' household spending," Mr Donnell said. "In the coming months we expect market conditions to remain subdued with prices likely to track sideways at best, but with the distinct possibility of small month-on-month falls."

But Hometrack is not predicting a serious drop in prices because the number of sales being agreed is still rising – albeit from a very low base. "As long as agents see sales still taking place, there is no real impetus to reduce pricing," Mr Donnell said. "Cash buyers and those purchasing with small mortgages continue to account for a sizeable proportion of the market."

At the top end, the situation is rosier. The average price of the top 25 per cent of properties rose by 1 per cent to £456,983 in June, giving a modest annual growth figure of 1.1 per cent, according to the estate agency portal Primelocation.com. But the top 10 per cent of the market saw prices rise by 1.1 per cent to £639,536, producing annual growth of a whopping 4.1 per cent, double the rate of the market as a whole. The average asking price in the top 25 per cent of the London market is now £1.1m.

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"The Election and Budget have highlighted the scale of the challenge facing the Government in balancing the public finances against individuals' household spending," Mr Donnell said. "In the coming months we expect market conditions to remain subdued with prices likely to track sideways at best, but with the distinct possibility of small month-on-month falls."

Whenever possible fall are spoke of they are always preceded with the word small, but yet rises can be sky bound and no body sees a problem with that.

It's high time the monkeys were shook from this money tree once and fore all...

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With capital growth dead and slowing...rents stagnant with the potential to fall, no wonder more are thinking of cashing in while they can.

Property £250,000.

Mortgage o/s £200,000 @ 4% = £8000 pa

Equity £50,000 loss of credit interest say 2% = £1000 pa loss min.

Rent receipt £750 per month = £9000 plus wear and tear voids fees etc.

Hardly worth the bother. ;)

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With capital growth dead and slowing...rents stagnant with the potential to fall, no wonder more are thinking of cashing in while they can.

Property £250,000.

Mortgage o/s £200,000 @ 4% = £8000 pa

Equity £50,000 loss of credit interest say 2% = £1000 pa loss min.

Rent receipt £750 per month = £9000 plus wear and tear voids fees etc.

Hardly worth the bother. ;)

your rent values look pretty low, where are you basing that on?

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Whenever possible fall are spoke of they are always preceded with the word small, but yet rises can be sky bound and no body sees a problem with that.

It's high time the monkeys were shook from this money tree once and fore all...

Yes, the media, even the "lefty" Indi, keeps thinking that high HP are a good thing. It is really very weird.

Estate agents on the other hand should be interested in volumes. If prices fall by 20% or 30%, but volumes double, they will make much more money!

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your rent values look pretty low, where are you basing that on?

Well, you could get up to £900 at a squeeze with lots of extras and free of any agent/management fees....when people's pay starts to be frozen, housing benefits are reduced this will have a negative impact on rents....you also have to factor in non payment of rents, this may become more common in the future....being a BTL landlord no longer the road to wealth and riches. ;)

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With capital growth dead and slowing...

Capital losses more likely.

rents stagnant with the potential to fall, no wonder more are thinking of cashing in while they can.

Property £250,000.

Mortgage o/s £200,000 @ 4% = £8000 pa

4%, OK, for a while. But at some point (1 or 2 years?) IRs will go back up.

Equity £50,000 loss of credit interest say 2% = £1000 pa loss min.

Rent receipt £750 per month = £9000 plus wear and tear voids fees etc.

Hardly worth the bother. ;)

More probably a loss.

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Well, you could get up to £900 at a squeeze with lots of extras and free of any agent/management fees....when people's pay starts to be frozen, housing benefits are reduced this will have a negative impact on rents....you also have to factor in non payment of rents, this may become more common in the future....being a BTL landlord no longer the road to wealth and riches. ;)

Just don't warn them yet Winkie. Wait a few more months, when the crash will be "locked in" ;)

:lol:

They must lose some of that unfair windfall gain.

.

Edited by Tired of Waiting

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So, are you a BTLer, "holding on to your portfolio"?

Not at all, like I have mentioned previously we have just sold our place for 250k and one of the options if we didn't sell it was to rent it out. The expected rental that we were told that we could get was between £1100 and £1200 per month.

Given that we could have re mortgaged if we did not sell, the remortgage would have cost us £560 per month, potentially leaving £300-400 in cash reserve at the end of the month, not a huge amount by not as dire as I thought it could have been

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Not at all, like I have mentioned previously we have just sold our place for 250k and one of the options if we didn't sell it was to rent it out. The expected rental that we were told that we could get was between £1100 and £1200 per month.

Given that we could have re mortgaged if we did not sell, the remortgage would have cost us £560 per month, potentially leaving £300-400 in cash reserve at the end of the month, not a huge amount by not as dire as I thought it could have been

Yes but was that mortgage a long term deal?

The only way you could be reasonably safe would be to get a 10 years fixed. How much would be the monthly payment in this case?

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Yes but was that mortgage a long term deal?

The only way you could be reasonably safe would be to get a 10 years fixed. How much would be the monthly payment in this case?

It was for 3 years, reverting to 2% above the base rate after that.

I am not sure what a ten year fix would have been

Edited by Bam

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It was for 3 years, reverting to 2% above the base rate after that.

I am not sure what a ten year fix would have been

I think they are now around 5%aa. On a 250k property interest alone would be 12.5k then, or just over 1k / month.

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I think they are now around 5%aa. On a 250k property interest alone would be 12.5k then, or just over 1k / month.

In which case we would be much better off getting a short termed loan and taking the risk

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In which case we would be much better off getting a short termed loan and taking the risk

How come?! IRs will go up at some point, and most probably they would make monthly payments higher than rental income. You would start to have a negative cash-flow. Can you afford that?

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In which case we would be much better off getting a short termed loan and taking the risk

A big risk though!

Well done on selling, it's my opinion and that of most on here that you have just sold at the second peak of a bear Market rally and prices will fall from here, to well below the previous low of 2008/09.

Well done on moving to NZ too. I'm sure things will be much better there than here!

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A big risk though!

Well done on selling, it's my opinion and that of most on here that you have just sold at the second peak of a bear Market rally and prices will fall from here, to well below the previous low of 2008/09.

Well done on moving to NZ too. I'm sure things will be much better there than here!

+ 1

+ 1

+ 10 !

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"The rising supply of housing for sale is now outstripping demand increases by three times,

with supply up 15 per cent in the past three months

compared with a mere 4.9 per cent increase in demand,

according to Hometrack."

http://www.independent.co.uk/news/business/news/uncertainty-puts-brake-on-property-prices-2012251.html

I have seen this articel spun to death by all sides... one group of HPC sheeple were trumpeting that prices are only rising in 11% of areas ( cue loads of fellow sheeple appluading the begining of the ice age in house price terms)... the article actually goes on to say that prices are falling in only 3% of areas... ( I imagine its flat in others)... so you could quite easilly see prices rising in nearly four times as many areas as its falling... in other words the completely opposite spin.

On this particular thread we have " supply rising three times faster than demand"... is it indicative of anything I wonder.. seasonality in some parts I am sure, I was surprised that demand was rising by 5% ( I would have thought if all the headlines about the financial armageddon were right demand would be falling regardless of supply)... and even though supply is rising appraently three times faster than demand, prices are still rising in foru times as many areas as they are falling in.... go figure.

My advice would be to ignore the headlines , ignore the spin from mags and newspapers and fellow HPC'ers ( who are amongst the worst culprits) and amke your own minds up... mine is already made up... A) the figures wherever they are from need to be treated with a healthy dose of scepticism B) Interest rates will not be raised before the economy is clearly into solid recovery mode C) Until interest rates are raised mortgage borrowing will get cheaper and cheaper. D) The most likely outcome for house prices is a long slow decline lasting many years.

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How come?! IRs will go up at some point, and most probably they would make monthly payments higher than rental income. You would start to have a negative cash-flow. Can you afford that?

I am sure they will go up, but it does not make any sense at all to fix at such a high rate when nobody can predict what the future will hold.

Roughly speaking the base rate will need to be about 4% before it will start to run at a loss.

It is a punt that we were willing take, it was either that option or sell

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I am sure they will go up, but it does not make any sense at all to fix at such a high rate when nobody can predict what the future will hold.

Roughly speaking the base rate will need to be about 4% before it will start to run at a loss.

It is a punt that we were willing take, it was either that option or sell

Yes, it is a punt.

I would not bet on base rate staying below 4% for the next 10 years.

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Yes, it is a punt.

I would not bet on base rate staying below 4% for the next 10 years.

I would just sell at that point

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These figures for supply and demand - I wonder how related or meaningful they are, other than as general trends.

- If someone wants to move, they put their house for sale, usually with one EA - supply of houses increases by 1. Easily measured.

- then a proportion of these sellers register at a number of EAs - does anyone know what proportion? - does each EA register a demand increase of 1?

- If more people are selling than wanting to buy, notwithstanding registering with several EAs does this mean that lots of houses are being sold from which the occupant doesn't need to or isn't able to buy somewhere else?

- Added to this is the number of ftbs who are `demand', but don't contribute to supply, and the number of `househunters' registered with EAs who haven't yet been told that they can't have a mortgage.

Please explain

Y

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I would just sell at that point

But that is the whole problem! You would not be alone, trying to sell then, and it would be the very bottom of the market. You would have to absorb a huge capital loss.

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A big risk though!

Well done on selling, it's my opinion and that of most on here that you have just sold at the second peak of a bear Market rally and prices will fall from here, to well below the previous low of 2008/09.

Well done on moving to NZ too. I'm sure things will be much better there than here!

New Zealand is just as mad on property as they are over here, so yes you’ll get more for your money but like here many are over stretched

For a decent place in Auckland we’ll need to spend about 6-7 x salary

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  • 145 Brexit, House prices and Summer 2020

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


      • down 5% +
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