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brocken spectre

Chain Reaction

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Can anyone make a wild guess to how many houses are caught up in chains at the moment!!?.

2 friends Sales have fallen through because of a break in the chain and back to where they started.

(sorry if garbled got a train to catch.) :lol:

BS

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Can anyone make a wild guess to how many houses are caught up in chains at the moment!!?.

2 friends Sales have fallen through because of a break in the chain and back to where they started.

(sorry if garbled got a train to catch.) :lol:

BS

Estate agent confirmed this to me recently, that a lot of chains are breaking. Also, check out property bee, it gives a clear indication that chains are breaking.

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Estate agent confirmed this to me recently, that a lot of chains are breaking. Also, check out property bee, it gives a clear indication that chains are breaking.

.....but what is causing the chains to break? finance failure, or could it be reluctance to sell by one party dragging their feet or simply cold feet....houses aren't exactly walking off the shelves any longer. ;)

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I'd say it's mainly due to people who are making offers before checking that they can get a mortgage. Many sellers just assume the equity will in their house will be enough for a deposit on the next without considering high deposit needs and stricter lending criteria. Also what a lot of people are finding is that the mortgage companies valuations are coming in much lower than EAs or surveyors and thus the lender will only lend less than the amount needed

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I'd say it's mainly due to people who are making offers before checking that they can get a mortgage. Many sellers just assume the equity will in their house will be enough for a deposit on the next without considering high deposit needs and stricter lending criteria. Also what a lot of people are finding is that the mortgage companies valuations are coming in much lower than EAs or surveyors and thus the lender will only lend less than the amount needed

I would say this... although it would be a complete guess.

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<br />Can anyone make a wild guess to how many houses are caught up in chains at the moment!!?.<br />2 friends Sales have fallen through because of a break in the chain and back to where they started.<br />(sorry if garbled got a train to catch.) <img src='http://www.housepricecrash.co.uk/forum/public/style_emoticons/default/laugh.gif' class='bbc_emoticon' alt=':lol:' /> <br />BS<br />

What has to happen under these circumstances is all the householders above the first timer have to take a hit on their houseprice to complete the chain.

So if £20,000 less offered by first timer, they pass the loss up to the top, to the richest person with the most expensive house (or share it out equally).

That's how it used to work & if people want to move/complete house-chains - they will have to get used to it.

Funny how expressions like housing 'chain' 'ladder' are used (tiered 'slave' ships, ball & chain & all that!)

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I'd say it's mainly due to people who are making offers before checking that they can get a mortgage. Many sellers just assume the equity will in their house will be enough for a deposit on the next without considering high deposit needs and stricter lending criteria. Also what a lot of people are finding is that the mortgage companies valuations are coming in much lower than EAs or surveyors and thus the lender will only lend less than the amount needed

Only yesterday a colleague told me about a friend of hers whose 'career' is doing up houses - she's been at it for some years.

For the first time ever, she has just been refused a mortgage on the house she had lined up for her next project.

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What has to happen under these circumstances is all the householders above the first timer have to take a hit on their houseprice to complete the chain.

So if £20,000 less offered by first timer, they pass the loss up to the top, to the richest person with the most expensive house (or share it out equally).

That's how it used to work & if people want to move/complete house-chains - they will have to get used to it.

Funny how expressions like housing 'chain' 'ladder' are used (tiered 'slave' ships, ball & chain & all that!)

sadly, it doesnt work like that.

Lets assume a chain of 3, all need an 80K mortgage, and the FTB has 20K deposit.

the bottom rung is buyable for £100K

next rung is buyable for £180K (thats 100K equity plus the 80K mortgage)

next rung is buyable for £260K ( thats 180K equity plus the 80K mortgage)

now lets see what happens when the lending gets tight....assume all can now only achieve a 60K mortgage.

the first on is buyable for 80K

next rung is buyable now for £140K ( thats 80K equity plus the 60K mortgage)

next rung is buyable now for £200K( thats 140K plus the 60K mortgage)

so, to support higher prices up the ladder, either the owners must put more in themselves or get bigger mortgages....

Banking has a lot to answer for. I beleive mortgages on private dwellings should be outlawed.

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I beleive mortgages on private dwellings should be outlawed.

That worked well in the past, in the old days normal people couldn't get loans, the rich got very rich and the poor got poorer, you had the landed and the poor and a huge gulf between the two, the poor were forced to pay relatively huge rents in relation to the cost of a property, without even being able to own the property unless the landlord/owner gave it to them for free. Building Societies were created with the idea you saved together, and then your savings could be used to create loans to pay for someone else to build a house, eventually you could then buy/build a house for yourself. This increased social mobility. If you ban lending the rich get richer

http://en.wikipedia....uilding_society

Edited by AteMoose

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That worked well in the past, in the old days normal people couldn't get loans, the rich got very rich and the poor got poorer, you had the landed and the poor and a huge gulf between the two, the poor were forced to pay relatively huge rents in relation to the cost of a property, without even being able to own the property unless the landlord/owner gave it to them for free. Building Societies were created with the idea you saved together, and then your savings could be used to create loans to pay for someone else to build a house, eventually you could then buy/build a house for yourself. This increased social mobility. If you ban lending the rich get richer

http://en.wikipedia....uilding_society

wouldnt apply today...the housing market is just that...a market...people buying and selling...the rich can partake without mortgages. they can outbid any mortgage a normal person could raise.

they dont today even with mortgages...instead, they invest in equities, private firms, and savings.

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.....but what is causing the chains to break? finance failure, or could it be reluctance to sell by one party dragging their feet or simply cold feet....houses aren't exactly walking off the shelves any longer. ;)

Anecdotal from a friend who has recently crossed to the dark art of estate agency is that every deal that is going through is doing so with fingers crossed. The two most common issues with breaking chains / failing deals is the inability to borrow and down valuations from lenders. This may be different in other areas of the UK / EA's.

This is an area covering the M3 / M4 corridor around Heathrow.

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  • 149 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% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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