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Hopeful FTB

What Is Going On?

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What IS going on in the housing market at the moment? Can someone please explain?

Now, APPARENTLY, the market is picking up again. Read an article though in the observer at the weekend about Brighton ( where I live) that said the average FTB home is 200- 250K - WHO CAN AFFORD THIS? I am on reasonably good money for Brighton as is my boyfriend but we would be SO strapped for cash if we spent 200k on a house!

Any explanations for all this? All I keep seeing at the moment is "buy now or you will never get on the ladder" everywhere as there are "so many bargains"- pardon me for not agreeing that 200k is a bargain for a 2 up 2 down tiny terrace in Brighton with no garden and a yard.

Nothing seems to add up- there seem to be a lot of job losses aswell.

Opinions please! :blink:

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Fear not hopeful.

I too live in Brighton and I've seen 10-15% falls since last year and a quick browse through latest homes show's how many 'new prices' there are. I keep back copies of latest homes and I've seen several properties reduced 3 times over as many months.

As for the market picking up again, this is all spin by the VI's. A small increase in transactions doesn't mean the crash is off, it's just a blip. And for every article that says the market is picking up there's lots more which suggest to the contrary.

Hang in there, sometime in the next three years you'll be paying 30% off todays prices!

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Hello H.FTB I’m from Brighton too.

IMHO nobody really knows what’s going on. VI’s are running around like chickens with no heads, creating panic for buyers and sellers. I think this is only going to make the bubble bigger and a louder bang when it comes to burst. Encouraging people to mount ladders at this stage of a doubtful economy is irresponsible to say the least.

I have noticed in our city centre more apparently sold properties have appeared, but is this a result of this hysteria or genuine confidence in the market. I think the former

Editing again

Edited by wheresmyfoxhole

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look to the past

I think your being paid too much.

The point is if they are actually going up and you thing there is a good chance that they are going to continue then you have no choice but to buy if you can (whatever you can).

But if FTB in general cannot afford it then who can (there are not enough BTL’s out there).

If there is job losses then give it time – as those job losses will bring on more, as there will be less money out there.

£200000 is not a lot of money really for a house, you have 25 years to pay for it- the cost is irrelevant, what matters is if it is going up or down. (As a note my cousin got his yearly bonus last year and decided that he would spend it on 2 BTL’s – he is still looking for his 2rd (anything under £300000) that’s having too much money)

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I sourced the article that you refered to over on motley fools site and it is just another piece of vested interest tat.Do not under any circumstances believe the majority of the rubbish printed in the papers.It has been discussed at length on this site previously just how much bias that the tabloids are responsible for peddling.On the same note the vast majority of the tv channels are still airing stuff that flies in the face of what is actually happening out there.

Brighton suffered a fall in price over the last quarter according to the land registry figures and admittedly prices have risen there to a greater degree than a lot of the surrounding area.This may well mean they take that much longer to correct than anywhere else in the region.The fact is we are only just entering correction territory now and by anyones estimate it could well take anything from four to ten years before the bottom is reached.That is an implausibly long time period for a good many people on this site to stomach and with good reason too.They have already held off or been priced out for 3 or 4 years so far.The sad truth is that it is far harder now than ever to hold off when prices are falling but not enough for some people.If you are tempted into the idea of contemplating buying please be aware that once the slide accelerates the tales of negative equity will be coming in thick and fast.Repossesions are starting to rise at an alarming rate already and the amount of bad debt reported by some banks is only just beginning.Take a look at the redundancy and liquidation notices that are being posted now day in and day out.Above all else ask yourself whether this sort of environment can stop prices falling any more.I know what the answer to that question is but the important thing is do you?..................................

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Even worse imagine the people that bought at the height of the '89 boom.  My flat had come on the market at £195k in 1990 and not sold for nearly a year before I bought it for £135k in 1991.  If it had been marketed in 1989 it would have sold for over £200k in flash.  Think what a pickle those people would be in.

Durch

Could you be kind enough to explain the 'sterling crisis' to me? Why are people so confident that this couldnt happen again? surely with all this extra money around the puond is worth less. Thanks

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It's called "the slope of hope".

I've read that the best time to buy is when no one would even bother to print a story about property because so many years of false hopes and bigger and bigger drops have left everybody sick to death.

You are spot on with this, in the last HPC, the subject of property seemed to simply disappear in the ether. No longer discussed down the pub, tv scheduling altered.

In fact your slope of hope reminds me of one of my own personal strap lines, "if everyone down the pub is discussing it, it must be over." Not that I`m a pub animal, but I`ve witnessed in my brother in law`s pub, Moorgate, over the past 6 years, two interesting phononema.

1999-2000, so many in there discussing what domain names they were bagging, what equities they had bought on the USM.....one year later...nothing spoken.

Summer just gone, down there again...talk re. how many in their BTL portfolios, how much off plan.....I reckon...by Xmas gone as a conversation.

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Another indicator - you will no longer think of yourself as a FTB priced out of the market.  Instead you will wonder if you should bother buying a house as everyone always loses so much money on them, gets taxed so much, spends so much on upkeep, etc.  The general mood will be "Houses:  mugs game.  Recipe for bankruptcy.  Money pit.  They'll turn your hair grey."

This is exactly right. In 1993 I was studying for my PhD and My wife and I considered buying a house. In fact we had the surveryors report done and everything. All the homes we went to look at had people in with negative equity. I was so nervous about it. In the end we called it off. The banks couldn't do enough to try and get us to change our minds.

Nobody was interested in property at all. I couldn't believe that anyone would buy it off us.

Didn't actually buy until 2002. We got a small 3 bed terrace in Surrey. We knocked them down from 180k to 160k. An EA tried to tell us it was now worth £270k I laughed all the way to my front door before putting my toe up his backside and sending him out into the street. We had our second child this year and suddenly we feel that the hosue is too small and we need a garden. I look at the next jump up and it just seems way out of reach. Only a crash could allow us to move on without signing our life away.

I keep telling my friends who are about to embark on BTL that prices can't go up again until they come down. You can't have unprecedented rises for year after year and then 18 months of flat prices and then huge rises again. They keep telling me that now is the time.

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FYI

An increase in the volume of transactions is not the same as an increase in house prices.

House sale prices cannot fall without sales. The more sales at lower prices... well you get the picture.

Any piece of housing news is generally twisted to represent an imminent recovery.

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Basically (and foolishly IMHO) the government had decided to join the ERM - basically to keep our sterling pegged to the low inflation Deutchmark, in expectation that we would all join the euro (then ECU) in the mid 90s.

Germany and the Deutschmark were a much lower inflation zone, so to keep our currency level, our own inflation needed to drop - that is high interest rates here.  We were in for hard times - for our own good of course, as we would end up like Germany.

Well, we didn't realise quite how high our interest rates would have to be for anyone to hold sterling, when they could swap for DM at a fixed rate.  Eventually the sterling interest rate exploded and the Bank of England had to intervene by buying lots of pounds with our foreign currency reserves.  Finally on the day rates rose 5%, they gave up, and let the pound drop.  End of playing King Canute.

IMHO that was the day we were never joining the Euro ever, no matter how much it's been discussed since.  No politician wanted to be in the same boat.

(Interestingly, lots of countries are suffering the depressions and ravages we never quite faced in the Eurozone now.  That's why IMHO it will explode at some point.)

EDIT:  Oh, and yes, although there is no target exchange rate anymore, interest rates might explode if China stops buying US treasuries and US interest rates go through the roof.  Ours and most other Western countries would have to rise too.

All interesting stuff, thanks for that. Gosh that was quite a big mistake to make. The sort of thing our current gevernment would never do................

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For example I bought a flat in London in 1991 for £135k, believing the hype that we had hit bottom.  That Autumn the exact same flat (mirror image - two basements of converted semis) came on the market at an asking price of £99k - unsurprisingly, it was bought for less.  My neighbours paid £40k odd less than me in a few months - and it went down from there.  Well can you imagine how that made me feel about my huge variable rate mortgage (payments nearly £1500 a month back then) - especially the next year when BoE base rate went up 5% in one day with the sterling crisis?

Frightening times watching the news in those days - even on the BBC.

I also bought a flat in London in 1991. You must have lived in a very nice area. £135,000 was a large amount for a flat then. (I paid £78,000)

No doubt you benefitted hugely after 1997 assuming you hadn't sold. Timing a purchase is extraordinarily difficult.

I took the view that so long as I could afford the repayment then it didn't matter. The identical flat above me was rented from about 1993 onwards, my mortgage repayment was marginally less than the rent charged.

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My friend is just in the process of buying a place in Slough, was on for 150k he offered 140k, and after much process they settled on 147.5k. Local new developments are priced at 190k and he thinks he will be making 40k in a year on this purchase. Seems this area is still rampent with sales, not to mention all the developments I have to drive past on the way to work, with Sold signs all over them...

And what about this SIPPs thing next March, won't that just encourage even more (300k bonus people, how lucky they are) to buy up whats left of the FTB properties, pushing us even futher away....

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Durch

Could you be kind enough to explain the 'sterling crisis' to me?  Why are people so confident that this couldnt happen again?  surely with all this extra money around the puond is worth less. Thanks

runforthehills,

The collapse in sterling happened because the pound went into the ERM at to higher exchange rate. A currency trader George Soros realised the pound was over valued and procced to sell it.

Here are some quotes from this site George Soros you will find further links regards more depth to the problem

Soros is the founder of Soros Fund Management. In 1970 he co-founded the Quantum Fund with Jim Rogers. It returned more than 4000% during the next ten years, and created the bulk of the Soros fortune.

[edit]

1992

On Black Wednesday (September 16, 1992), Soros became instantly famous when he sold short more than $10bn worth of pounds, profiting from the Bank of England's stubborn reluctance to either raise its interest rates to levels comparable to those of other European Exchange Rate Mechanism countries or to float its currency. Finally, the Bank of England was forced to withdraw the currency out of the European Exchange Rate Mechanism and to devaluate the Pound Sterling, and Soros earned an estimated US$ 1.1 billion in the process. He was dubbed "the man who broke the Bank of England."

The Times October 26, 1992, Monday: "Our total position by Black Wednesday had to be worth almost $10 billion. We planned to sell more than that. In fact, when Norman Lamont said just before the devaluation that he would borrow nearly $15 billion to defend sterling, we were amused because that was about how much we wanted to sell."

[edit]

1997

In 1997, under similar circumstances during the Asian financial crisis, then Malaysian Prime Minister Mahathir bin Mohamad accused Soros of bringing down the Malaysian currency, the ringgit.

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Do you think we could help the market turn around, like going into estate agents and viewing properties only to storm off not impressed by the quality vs price they have laid down. if we all did it to all the estate agents it may have a massive impact? and we could all feel good about ourselfs for helping out the little guy :)

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My friend is just in the process of buying a place in Slough, was on for 150k he offered 140k, and after much process they settled on 147.5k. Local new developments are priced at 190k and he thinks he will be making 40k in a year on this purchase. Seems this area is still rampent with sales, not to mention all the developments I have to drive past on the way to work, with Sold signs all over them...

And what about this SIPPs thing next March, won't that just encourage even more (300k bonus people, how lucky they are) to buy up whats left of the FTB properties, pushing us even futher away....

Purplemonkey, I'm from the Slough area, and I don't see anything to worry about. I was looking in the Property News last week, and those new builds at 190-200k are definitely NOT selling.

Just looking at the offered discounts, with 5% deposit paid, PLUS 7-8% cashback, PLUS legal fees, PLUS costs, it brings the price down to 170k, without any negotiation. I thought it must have been an error, but I re-read the advert, and they are definitely knocking 30k off the price to get people interested. There are just too many of these poor developments in the area. Have you seen the 5 floor monstrosity next to Salt Hill Park?? 160-170k for a future crack den. And the ones a bit further down on Farnham Road - just as bad and still 160k+.

I'm in the new area of Cippenham, and prices are falling there to. I'm renting a nice 3 bedroom, and saw a similar property up for sale at 285k. This has not sold in 4 months. Another house has come on this week, and whilst it doesnt have the conservatory it is priced at 250k - quite a big difference.

Have faith, things are happening, but there's a lot of old stock on the market, and it's making the prices look a lot higher than they really are.

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Salsa,

I had to watch a 'nice' building get torn down so someone can build 40more 2 bed flats there. It seems crazy to me that they keep thinking they have a market. From what I can see the market is coming from Londons FTB's where they can't buy cause a 1bed flat is now 200+k. This is what my buddy is doing, he looked at 2beds around his work area, and kept going out and out and out until he found something in the 140-150 bracket. I wonder where this will stop, if people can't afford london but they can buy in slough and get to london in 15 mins, so what shouldn't they? apart from the obvious problem....slough!

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Salsa,

I had to watch a 'nice' building get torn down so someone can build 40more 2 bed flats there. It seems crazy to me that they keep thinking they have a market. From what I can see the market is coming from Londons FTB's where they can't buy cause a 1bed flat is now 200+k. This is what my buddy is doing, he looked at 2beds around his work area, and kept going out and out and out until he found something in the 140-150 bracket. I wonder where this will stop, if people can't afford london but they can buy in slough and get to london in 15 mins, so what shouldn't they? apart from the obvious problem....slough!

:lol: SLOUGH! :lol: Says it all really!

Thing is though, how many towns are there equivalent to Slough i.e 20 mins from a London mainline station.

I know that in Slough they have knocked up a massive amount of 2 bed flats. I can think of at least 10 blocks, and that's only in a 2 mile radius of town centre. I'm sure there's about 5 times that in the surrounding areas. Multiply that by the amount of similar towns, and I'm sure you will see a massive excess against the number of London FTB's.

I can see why the developers have done what they have, but I suspect they have run out/ are running out of buyer's and once these block's start to stand empty the prices will really bottom out - as someone said before, the developers don't have sentiment to worry about, they need to sell these flat's, so they should be the first people to drop prices significantly..

I am sure this argument stands across a whole lot of areas that don't include London FTB's too, and should just be a matter of time.

I have my finger's cross'd anyway. I can afford to buy at 180k, and I want my house not a 2 bed flat overlooking the M4! Just need a 25% drop in prices.......

EDITED for lack of typing skills

Edited by Salsa

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:lol: SLOUGH!  :lol: Says it all really!

I have my finger's cross'd anyway.  I can afford to buy at 180k, and I want my house not a 2 bed flat overlooking the M4!  Just need a 25% drop in prices.......

EDITED for lack of typing skills

Sounds a bit like my predicament, I have a 20k deposite sat in Bonds at the moment, I can afford to buy a studio in london, or a 2 bed flat in Slough! but I refuse, I bought my mum a nice 3bed town house for 50k in 1999, and thats what I want to do. So I'll wait, wait till I can get something I think is worth the money. Actually I'm going on a 6month holiday to Oz, cause I need to get out of this work-sleep-work-new car-work-sleep-another credit card-work-sleep senario. An I'm hoping when I get back I might be able to buy something. But what about all these FTB's here, like you an me, will you buy when you see something you like at what you think is a good price, because you have the money, or will you wait because you think the market is still coming down? Isn't that a big difference from the 1990's crash, a lot of us actually have a lot of money! no current recession, no money problems, we're just waiting, but if 2 of us see the same property come down from 180k to 160k, which one of us would buy it, would we bid against each other back up to 180k? hummm. this is the biggest dilema I can't get my head around!! so somebody please convice me this won't happen, and why?

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I'm not sure there are more waiting FTBs with money as a proportion of GDP than in the last crash.  If anything most people seem to have a lot more personal debt.

Also you are still thinking as people do when the market is in a bubble - understandable.  In four or five years you'll find it hard to coax yourself to buy a house, even if your head is saying now's the time.

think you might be right, I bought Lastminute.com stock right at the top of the bubble, and how thankfull I was we were resticted in purchasing stock, I only lost a couple a hundred. I am so desperate to buy a house, I was even thinking of doing it before I left for Oz, but I keep mentally trying to restrain myself.

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Isn't that a big difference from the 1990's crash, a lot of us actually have a lot of money!

Most people in the FTB age bracket DON'T have a lot of money, they have a lot of debt.

http://www.myfinances.co.uk/borrowing/debt...36;14021768.htm

http://money.guardian.co.uk/creditanddebt/...1569016,00.html

http://www.thisismoney.co.uk/news/article....75&in_page_id=2

no money problems

YOU may not have any money problems; however I would suggest that you are in the minority in your age group.

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Sounds a bit like my predicament, I have a 20k deposite sat in Bonds at the moment, I can afford to buy a studio in london, or a 2 bed flat in Slough! but I refuse, I bought my mum a nice 3bed town house for 50k in 1999, and thats what I want to do. So I'll wait, wait till I can get something I think is worth the money. Actually I'm going on a 6month holiday to Oz, cause I need to get out of this work-sleep-work-new car-work-sleep-another credit card-work-sleep senario. An I'm hoping when I get back I might be able to buy something. But what about all these FTB's here, like you an me, will you buy when you see something you like at what you think is a good price, because you have the money, or will you wait because you think the market is still coming down? Isn't that a big difference from the 1990's crash, a lot of us actually have a lot of money! no current recession, no money problems, we're just waiting, but if 2 of us see the same property come down from 180k to 160k, which one of us would buy it, would we bid against each other back up to 180k? hummm. this is the biggest dilema I can't get my head around!! so somebody please convice me this won't happen, and why?

Well, my situation's a little bit different. I've done things slightly backward! I'm terrible when it comes to saving, but excellent when it comes to paying things back - so.....

At the moment, I don't have a deposit, but I do have a bloody nice rented house. I've furnished it with everything I would have in my own property, with leather sofa's, nice furniture, plasma TV's and all the other mod cons . (Before everyone slates me, I am young and had virtually no material possessions at all after renting furnished houses for past 2 years) My outgoings have been very high for the past 2 years, but I have paid off about 12k of 20k debts off, plus bought plenty of nice stuff for the house.

By the end of the year, I will have cleared my CC and have only a small loan for about 4k left.

I decided that as I couldn't afford in the foreseeable, I wasn't going to live in poverty until such time came along. Once my CC is paid off, I will use my new found discipline and bank the difference between the new outgoings and what I have been paying.

It's going to take me another 2 years from here, but I am confident of a good deposit and then I am going to look where prices are then.

If the right property comes up in between, then I will miss out but I am happy that for 2 years I will have a good standard of living and HOPEFULLY property prices will be more realistic then.

I can tell you as well, that there are not as many people as you think with big deposits stashed away. I know the majority of my friends/ colleagues and their friends have hardly any decent savings, and the only ones able to buy are the ones with Bank of Mum and Dad Deposits.

I think there will be enough available properties in the coming years, that we shouldn't have too many Dutch Auctions going on.

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  • 302 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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