Swansea-State Of The Market

[Clarky Cat]

Who on earth is going to buy all these overpriced houses?

As an example, a GP with gross earnings of £100,000 would probably be someone you'd expect to be living in one of them.

If they still have a student loan then this will give about £45,000 after tax and deductions. Using affordability criteria of 35% take home pay going on mortgage, at 4% on a 25 year term gives about £240,000. A quick flick on zoopla shows you could get a 3 bed bungalow in Bishopston, a terrace in Mumbles or a detached house on a busy road in Upper Killay.

If a high earning professional can't afford more than that, then who can?

[The Masked Tulip]

Who on earth is going to buy all these overpriced houses?

As an example, a GP with gross earnings of £100,000 would probably be someone you'd expect to be living in one of them.

If they still have a student loan then this will give about £45,000 after tax and deductions. Using affordability criteria of 35% take home pay going on mortgage, at 4% on a 25 year term gives about £240,000. A quick flick on zoopla shows you could get a 3 bed bungalow in Bishopston, a terrace in Mumbles or a detached house on a busy road in Upper Killay.

If a high earning professional can't afford more than that, then who can?

A surgeon friend of mine cannot afford to buy in Langland/Mumbles/Gower area. He grosses more than 100K.

The houses on for between 500K and over 1 million simply drag up the rest of the market so, as you say, pretty average houses cost about 250K.

HPCers on here regularly email houses in their parts of the country and they make Swansea asking prices look all the more ludicrous. One HPCer regularly emails me stuff from Scotland where, for 250K, you can buy some superb properties. For a million you basically get estates rather than houses.

I think the high valuations are partly to do with an EA war IMPO to get property on their books. Or perhaps some agencies now make more money from lettings than selling that they would rather you let your house out via them than sell it? Who knows?

Perhaps some EAs are themselves so much underwater with huge mortgages that they hope by ramping the market generally that it will save their own financial backsides? Perhaps a large percentage of these house sellers are on interest only mortgages and they need a sky-high price just to pay off their mortgage? Again, who knows?

The Swansea housing market, quite simply, is in an enormous bubble generated by ultra low IRs, interest only mortgages and, IMPO, other things.

I have no doubt that when IRs eventually rise, as they will oneday, that the Swansea housing market will crash spectacularly. Sadly, short of a bond crisis, those IR rises look far away. But that can change in a blink of an eye.

What cannot be denied is how increasingly dirty and run-down Swansea is - and that includes Mumbles where Newton Road is about to gain yet another charity shop - how great the gap is between the wealth of the city and the price of houses.

Edit:

And, of course, people just trying it on.

Edited February 3, 2013 by The Masked Tulip

[Clarky Cat]

Yes it does seem a bit ridiculous. Someone I know bought a 3 bed semi in an Oxfordshire village for just over £200,000 a few years ago. At the time I thought it was(and still is) a ridiculous amount of money for a fairly average modern-ish house. However it's a nice area, good village with all amenities, in one of the most affluent parts of the country and less than an hour on the train to London. The same amount of money in a good area of Swansea would probably get you less than that without any of the other advantages.

[The Masked Tulip]

Yes it does seem a bit ridiculous. Someone I know bought a 3 bed semi in an Oxfordshire village for just over £200,000 a few years ago. At the time I thought it was(and still is) a ridiculous amount of money for a fairly average modern-ish house. However it's a nice area, good village with all amenities, in one of the most affluent parts of the country and less than an hour on the train to London. The same amount of money in a good area of Swansea would probably get you less than that without any of the other advantages.

Nail on the head - such houses are within an hours commute of London where people can, and do, earn often far higher wages than in Swansea. Hence why the asking prices are just silly here.

Don't forget - an awful lot of these houses have been on the market now for years and have not sold. I could give you a long list of houses that have been on the market for 2, 3, 5 or more years and have not sold. Quite a few have never dropped their asking price.

One Swansea West EA tells me that the majority of houses on his books will probably never sell because their asking prices are way too high. I asked why they keep them on the books and was told that they have to have stock otherwise their walls would be empty.

In the last month I have begun to see the same old houses that did not sell last year... or sometimes in the YEARS before... coming back on the market... sometimes they change EAs sometimes they do not... and they come back on for the same asking price that they did not sell for... or for higher asking prices...

One EA has told me that lots of people will never sell their house because there simply is not the volume of people in Swansea with that kind of income to buy up all the houses that are over-priced. Do the EAs care - I suspect some do not?

[The Masked Tulip]

FWIW,

I was talking last night with a senior bod in one of the Swansea EA firms. This is what I was told:

1. Asking prices are "totally unrealistic" in Swansea West due to, in the opinion of the person I was chatting with, a couple of firms allegedly "seriously over-valuing properties just to get houses onto their books".

My contact felt that lots of sellers are being given unrealistic views of house prices and of the housing market.

2. As a result of the above the owner(s)of one of the above firms has apparently been complaining that the market is now much worse than last year and that this/these owner(s) of this particular firm are allegedly now getting very worried about a lack of sales.

The person I was chatting with had no sympathy as he/she felt that this/these individual(s), allegedly, had "ramped asking prices to truly unrealistic levels" in Swansea West and that his/her/their asking prices were now a big part of the problem of lack of sales.

3. As a result of the above surveyors are allegedly very reluctant to give the OK on valuations anywhere near the asking prices. I was told that the surveyors are scared stiff of being sued by buyers down the line so surveyors are looking for any excuse to downgrade buyer offers considerably.

I asked what sort of prices and I was given examples of houses on for 250K asking which surveyors think should be 200K, houses on for 200K which surveyors think should be 170K and houses on for 350K which surveyors think should be nearer 250K.

4. As a result of the above more and more houses are getting surveys back where the surveyors have allegedy downgraded the price from the actual asking price considerably.

The person I was chatting with said that once a surveyor has given such a valuation on a property to a bank the bank will not give a mortgage out on any price above it - but my contact said that lots of estate agents do not realise or understand this fundamental aspect of mortgages and so they keep marketing houses at asking prices that are vastly above what any banks will lend for it.

5. As a result of the above despite there being a vast number of properties going SSTC in January/Februar there are now long chains that cannot complete because the surveyors will not greenlight the offers made and/or because the banks will simply not lend on such prices.

I was given examples of numerous properties where the buyer had made offers and the banks had come back saying that the seller had to increase their deposit from anywhere between 20K to 150K.

I was told that most of the chains are people buying who also need to sell with very few new or non-chain buyers currently in the market.

6. I was told that there are more people who are forced to sell - divorce and banks now getting tough was cited as the main reason - and that my contact thought that this would show up in the land registry figures a few months down the line where certain houses will be shown to have sold for considerably less than others which are on for "silly asking prices".

[The Masked Tulip]

Spoke with an EA today who said that the market is selling up to 200K but once you get above that it slows rapidly with the mid market above 250K "dead" up to about 600K. Said that there were then some 600K sales but they were the very rare rich cash buyers or people who had sold up in London but that there were very few of these.

The EA said that too many houses that should go for 250K had been ramped up in asking prices well over 300K with many of them in the 325K to 400K asking price range when they should be selling for 250K tops. Said that the EA ramping war had now killed the market as most people would not pay more than 250 for such houses, and the banks will not lend, but that too many EAs had conivinced sellers their houses were worth 100K or so more.

[Swansea Estate Agent]

All the interest we are getting is up to £200k too.

We are getting lots of buyers looking upto £250k, but no offers on anything over 200.

80% of buyer leads we are getting since March have budgets of 90k or less. The other 20% are all under 250k. Nothing over.

[The Masked Tulip]

All the interest we are getting is up to £200k too.

We are getting lots of buyers looking upto £250k, but no offers on anything over 200.

80% of buyer leads we are getting since March have budgets of 90k or less. The other 20% are all under 250k. Nothing over.

Thanks - very interesting.

Have 'they' ramped up asking prices so much that the market above 250 is now dead - or almost dead?

OK, there will be some exceptions who either are lucky to sell their more expensive house and downsize, or who have the cash to buy over 250K, but I suspect most people simply cannot afford to pay over 250K for a house.

I was just chatting with a couple - both good, professional earners - and they said they could just about afford 250K but certainly not above it... and they commented that if they, with their good safeish jobs, cannot afford to pay such money how can many people in the area.

[The Masked Tulip]

Spoke with a director of one firm last night and was told that they were buoyant up until 2 weeks ago and then "it has just fallen off a cliff".

I ventured that perhaps everyone who intended to buy rushed out to buy and now, as they have made offers/have bought, that the number of buyers has mostly been exhausted for this year. I could see the cogs working for a moment

[thirdwave]

Plenty of sold signs going up where I live in the past month or so. Viewed something recently just to be nosey and the agent (JF) who showed me around said things had been looking up of late. Maybe she was just being her usual compulsive liar EA self but I certainly have seen some evidence locally to back up her claims..

[The Masked Tulip]

Plenty of sold signs going up where I live in the past month or so. Viewed something recently just to be nosey and the agent (JF) who showed me around said things had been looking up of late. Maybe she was just being her usual compulsive liar EA self but I certainly have seen some evidence locally to back up her claims..

Yes, there was a surge of sold signs in the first few months but many of those sales are now falling through. In EA talk a sold house is nothing more than a house that an offer is made on.

I spoke with another EA this weekend, in Mumbles, who felt that a massive crash would occur in the coming fee years as asking prices werr completely over the top but that more and more sellers needed to sell. Vast number of people looking to downsize but unable to sell tbeir homes apparently.

[The Masked Tulip]

New EA chap opened up an office in Mumbles. Here is his linkedin page.

http://uk.linkedin.com/pub/james-phillips/2b/63/664

Director

Carter Phillips

June 2013 – Present (3 months) Mumbles, Swansea

A new Estate Agency located in Mumbles and based on modern methods but with traditional values, Carter Phillips isn't looking to revolutionise Estate Agency but just to make it a better, more transparent experience for both buyer and seller alike.

Owner

Gower Studios

January 2009 – Present (4 years 8 months) Swansea, United Kingdom

Bespoke printing services, art work, corporate clothing, one off prints. We offer a friendly, professional service and pride ourselves with good quality work. Whatever your requirements we will always try our best to find the right solution.

Valuer

We Will Homes

June 2007 – February 2012 (4 years 9 months)

Co-ordinator / Parts / Logistics

Promax Motorsport

March 2001 – May 2006 (5 years 3 months)

Rally Team in South Wales.

Carried out Team Co-Ordiation

Ran Hospitality Division for many blue chip Companies:

Sony/Orange/WDA/C4/The Times/BP/FORD/Mitusbishi

Started up Parts Department

Good for him for taking the chance on giving it a go.

IIRC I read in the Post last year that planning permission had been turned down for a new EA business in Newton Road. At the time I recall thinking how, surely, such a thing was anti free trade/anti competitive and would surely break all kinds of UK and EU laws. In other words, you can't favour other businesses in an area by stopping competitors opening up in the same area.

So I am glad to see someone else open up in the area. Might even do the same myself as, IMPO, being an EA in Mumbles does seem to be lots of jam for pretty little effort.

[mumblesmental]

a sizable loss??

http://www.zoopla.co.uk/for-sale/details/29758125?search_identifier=0b52c7420c00c557c37bd347270fc03a

Bought for 950k - add stamp duty etc etc and the cost of a large extention and full refurb , I think given that this is still on the market having dropped 100k a large loss is looming!

[The Masked Tulip]

All depends how much they spent on it. Full asking price - lol - might give them 50K to 150K profit.

Heard a story recently of a house bought in Summer 2012 for 450 and put back on in Dec 2012 for 660 asking. Since dropped to mid 500s. Owners claim to have spent 200K on it but perhaps it was just '200K' of white paint?

The market is very interesting at the moment. So many properties just sitting there over 300K not selling, a desert between about 230 and 300 and then stuff around 150 and below selling. I hear that EAs are already getting worried again.

[The Masked Tulip]

Let's put the asking price up shall we?

http://www.rightmove.co.uk/property-for-sale/property-19605792.html

04 September 2013 19:15:13

Agent found: Simpsons

Agents Location found: Mumbles

Agents Telephone found: 01792939032

Price changed: £295,000 £299,000

Status changed: Available null

09 August 2011 11:18:31

Brief Description found: Located in the heart of Llangennith, a detached three bedroom bungalow situated in a quiet position enjoying views from the front of Whitemoor and at the rear to Rhossili Bay.

Price found: £295,000

Status found: Available

Subtitle found: 3 bedroom detached house

Title found: Llangennith, SA3

[The Masked Tulip]

Station Road, Llanmorlais, SA4

http://www.rightmove.co.uk/property-for-sale/property-37605211.html

17 September 2013 13:26:41

Brief Description changed: A detached individually designed three bedroom bungalow with additional recreational rooms on the lower ground floor to the rear which are accessed from the garden. The property is situated in a quiet location just off the North Gower Road, and stands on a very large level plot. Part exchange considered

Price changed: £249,950 £229,950

29 August 2013 08:30:21

Price changed: £229,950 £249,950

14 August 2013 14:33:36

Agents Address found: 45 Gower Road, Sketty, Swansea, SA2 9BX

Detailed Description found: Tenure: Freehold ACCOMMODATIN COMPRISES: ENTRANCE HALLWAY uPVC double glazed front door with stained and leaded glass set into an arched storm porch with ceramic tiled floor. Hardwood glass panelled d...

14 August 2013 13:16:37

Agent found: Simpsons

Agents Location found: Swansea

Agents Telephone found: 01792939007

14 August 2013 12:58:41

Price changed: £249,950 £229,950

08 April 2013 14:49:35

Price changed: £269,000 £249,950

16 February 2013 09:59:37

Brief Description found: A detached individually designed three bedroom bungalow with additional recreational rooms on the lower ground floor to the rear which are accessed from the garden. The property is situated in a quiet...

Price found: £269,000

Status found: null

Subtitle found: 3 bedroom detached bungalow

Title found: Station Road, Llanmorlais, SA4

Edited September 17, 2013 by The Masked Tulip

[mumblesmental]

these look ok for the money?

http://www.homesonview.co.uk/Scripts/ShowProperty.asp?css=&CompanyID=JNFSMUMB&AgencyID=JNFSMUMB&ID=JKP21070

any thoughts?

[The Masked Tulip]

these look ok for the money?

http://www.homesonview.co.uk/Scripts/ShowProperty.asp?css=&CompanyID=JNFSMUMB&AgencyID=JNFSMUMB&ID=JKP21070

any thoughts?

Buy 3.

[spxy]

these look ok for the money?

http://www.homesonview.co.uk/Scripts/ShowProperty.asp?css=&CompanyID=JNFSMUMB&AgencyID=JNFSMUMB&ID=JKP21070

any thoughts?

....are they for hobbits?

[The Masked Tulip]

House in Mumbles that I know the owners have been trying to sell for about 5 or 6 years in the 550K region. Been off the market but now back on for just short of 700K asking.

Obviously people will now buy it and get a mortgage on it.

[The Masked Tulip]

It was on for 950K asking. You can see in the property bee info what the property was before the split:

http://www.rightmove.co.uk/property-for-sale/property-37190542.html

But now they have split it into two they want 525K for the above and 475K for below;

http://www.rightmove.co.uk/property-for-sale/property-43377287.html

So that is a price increase of 50K asking then!

Slade, Oxwich, Gower, SA3 1NA

http://www.rightmove.co.uk/property-for-sale/property-37190542.html

27 September 2013 00:54:38

Agents Address found: 12 Windsor Place, Cardiff, CF10 3BY

Detailed Description found: Tenure: Freehold LocationBettis Meadow enjoys a delightful elevated setting in the hamlet of Slade that lies between the larger villages of Oxwich to the east and Horton to the west on the famous sout...

26 September 2013 19:08:12

Agent found: Savills

Agents Location found: Cardiff

Agents Telephone found: 02922292067

Price changed: £950,000 £525,000

Subtitle changed: 6 3 bedroom bungalow

http://www.rightmove.co.uk/property-for-sale/property-43377287.html

27 September 2013 00:53:57

Agents Address found: 12 Windsor Place, Cardiff, CF10 3BY

Detailed Description found: Tenure: Freehold LocationSlade Barn enjoys a delightful elevated setting in the hamlet of Slade that lies between the larger villages of Oxwich to the east and Horton to the west on the famous south G...

26 September 2013 19:08:12

Agent found: Savills

Agents Location found: Cardiff

Agents Telephone found: 02922292067

Price found: Guide Price £475,000

Status found: null

Subtitle found: 3 bedroom character property

Title found: Slade, Oxwich, Gower, SA3 1NA

23 January 2013 18:42:23

Brief Description changed: Escape to the Gower 3 bed main residence, 3 bed barn conversion. About 1.5 acres

16 January 2013 18:54:42

Subtitle changed: 6 bedroom smallholding bungalow

16 January 2013 18:19:56

Subtitle changed: 6 bedroom bungalow smallholding

16 January 2013 12:36:30

Subtitle changed: 6 bedroom smallholding bungalow

16 January 2013 10:26:11

Subtitle changed: 6 bedroom bungalow smallholding

16 January 2013 00:15:06

Subtitle changed: 6 bedroom smallholding bungalow

16 January 2013 00:08:08

Subtitle changed: 6 bedroom bungalow smallholding

15 January 2013 20:18:03

Brief Description found: Escape to the Gower

Price found: £950,000

Status found: null

Subtitle found: 6 bedroom bungalow

Title found: Slade, Oxwich, Gower, SA3 1NA

[spxy]

It was on for 950K asking. You can see in the property bee info what the property was before the split:

http://www.rightmove.co.uk/property-for-sale/property-37190542.html

But now they have split it into two they want 525K for the above and 475K for below;

http://www.rightmove.co.uk/property-for-sale/property-43377287.html

So that is a price increase of 50K asking then!

...and each is only just over 100 sqm's in size....good grief!

[The Masked Tulip]

I did a run through Property Bee in RM yesterday - loads of reductiosn but alll this from silly asking prices. Only came across one that had put up the asking price on a single property by about 8 or 9K.

Then there is the split one above of course.

I had an EA try to convince me yesterday that the land registry fall of 2% last year in Swansea was down to Swansea East falling whilst they are claiming that Swansea West rose 3% in prices. I pointed out that such a percentage, if true, could be queered by just one rich bankster buying a huge house.

[thirdwave]

I did a run through Property Bee in RM yesterday - loads of reductiosn but alll this from silly asking prices. Only came across one that had put up the asking price on a single property by about 8 or 9K.

Then there is the split one above of course.

I had an EA try to convince me yesterday that the land registry fall of 2% last year in Swansea was down to Swansea East falling whilst they are claiming that Swansea West rose 3% in prices. I pointed out that such a percentage, if true, could be queered by just one rich bankster buying a huge house.

Bo**lx..With Singleton closing, I expect Swansea West to take a right hammering in the next few years (in terms of sales volumes, not asking prices which are likely to rocket). I don`t know many people who are looking to buy currently and the biggest employer in town,NHS, has frozen recruitments so little chance of any 'green shoots'. However, the odd house is still going for crazy money which sadly perpetuates the delusion of rising prices.

Edited October 4, 2013 by thirdwave

[The Masked Tulip]

Bo**lx..With Singleton closing, I expect Swansea West to take a right hammering in the next few years (in terms of sales volumes, not asking prices which are likely to rocket). I don`t know many people who are looking to buy currently and the biggest employer in town,NHS, has frozen recruitments so little chance of any 'green shoots'. However, the odd house is still going for crazy money which sadly perpetuates the delusion of rising prices.

I didn't know that recruitment was frozen in the NHS? I noticed on jobserve this week there were some nursing posts advertised but presumably there are exceptions.

The Swansea madness continues.

I sae a house this week come on for 320K after filing to sell for 2 years with another EA for 325K. Yep, that 5K will make all the difference now won't it.