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Linda Yilmaz

Simple Question

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My sister has a small two bed house which has doubled in value since she bought it a few years ago with her husband. They have a one year old and another on the way now and want to move. They were quite shocked when they were told that the property would be out of the range of any ftb as it really is a small "starter" type home. Also she knows her older sister (me) is priced out of the market as a potential ftb and knows this is not right. Someone made them an offer on their home which was about £15,000 lower than the asking price and they can't accept it because then they would not be able to afford to buy a house on the next "rung of the ladder" because these homes are equally overly priced.

What needs to happen for prices to fall? Does a crash have to come from the top of the market and the ftb end of the maret at the same time? I have heard that prices are starting to fall at the top end and the bottom end is bad as we all know. Has anyone got any idea of how long this could take?

Can anyone explain? Thanks. :)

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I’ll have a go :) … the problem is that an FTB can only buy at current prices if they signup to an excessive level of borrowing and the bridge the remaining gap with a large deposit. But most are (quite sensibly) unwilling or unable to take on this much risk (falling prices, prospect of higher inflation and higher IRs) so loose interest (no worry about missing the ladder anymore) and get on with other things … without FTBs or BTLs chains can’t complete and the whole thing grinds to a halt. EAs need transactions to make a living, so try to serve up some bargains to tempt the FTBs … bargains are relative, so it's downhill ...

Edited by spline

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Has anyone got any idea of how long this could take?

Can anyone explain? Thanks. :)

For prices to fall significantly, at least one of the following has to happen:

(1) Mortgage lenders significantly tighten their lending criteria. (demand falls)

(2) Existing mortgage holders default en mass (due to rises in interest rates or unemployment), creating a glut of repossessed property hitting the market. (supply increases)

(3) Sentiment turns against property as the appetite for property as an investment class falls (due to alternatives becoming more attractive). (demand falls)

It seems that (3) is in progress but there's no sign yet of (1) or (2).

Whilst house price booms often happen in a short space of time (as the masses clamber on board), crashes tend to happen relatively slowly, as people are a lot more reluctant to accept losses than they are to accept gains. This is known as the 'sticky downwards' effect. Indeed, the last crash panned out over 3-5 years and I'd expect this one to be much the same.

Edited by doogie

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My sister has a small two bed house which has doubled in value since she bought it a few years ago with her husband. They have a one year old and another on the way now and want to move. They were quite shocked when they were told that the property would be out of the range of any ftb as it really is a small "starter" type home. Also she knows her older sister (me) is priced out of the market as a potential ftb and knows this is not right. Someone made them an offer on their home which was about £15,000 lower than the asking price and they can't accept it because then they would not be able to afford to buy a house on the next "rung of the ladder" because these homes are equally overly priced.

What needs to happen for prices to fall? Does a crash have to come from the top of the market and the ftb end of the maret at the same time?  I have heard that prices are starting to fall at the top end and the bottom end is bad as we all know. Has anyone got any idea of how long this could take?

Can anyone explain? Thanks. :)

Have they already tried to pass the cut up the ladder?

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I suppose the problem is that most people sell before they buy so you'd be taking a gamble that you'd be able to get a cut up the ladder.

You get the best price you can on your property i.e. a firm offer - add on the extra you want to borrow and go out and make offers.

It's up to you how far you try to knock people. If you see a house for £220k you'd think - 'they'll never take 180k'. What if the house has been on the market for 6 months? They can't move until they get a firm offer.

This is where Estate Agents or w@nkers as they are affectionately known, ought to, but don't, play a part.

They should say to a vendor 'we've got an offer of 180k - don't dismiss it out of hand - this is a buyer's market and people in a position to proceed are rare. Pretend you have accepted the 180k and go out and make offers yourself. Maybe we can get a chain together if everyone is realistic.

It is time for the w@nkers to be a bit more pro-active in getting sales together. Instead of that they rush around like headless chickens desperate to take on more houses to not sell.

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  • 335 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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