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2buyornot2buy

Trading Up In Ni.

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A similar topic is being discussed over on the main board. I thought it would be a good idea to talk about what we’re seeing here from a local perspective.

My brother is in the process of trying to trade up. He lives in the Ballymena area and is selling his large 3 bed semi. He’s a good few years older than I am but purchased around 2004. (so I think he would have little or no equity apart from my parents helping him out ). We had an interesting talk about this on Sunday. Now my brother comes from the “property double every 7 years” side of town. He has been visiting several EAs in the area. They have all been honest enough saying sales of second rung houses (ie detached, 4 bed) has been nonexistent. The said they are now mostly selling new builds, terrace and repossessions but still in no significant quantities.

What I want to know is, how do people her think this will effect the markets? With no trading up what will happen to the larger detached houses? Lets be honest there are plenty of them about. I personally think that what we will see is the gap between the different levels coming back down to reasonable levels.

BVI reports that sales are on the up and new builds are realistically priced having led the way on price reductions. If seller’s expectations become more realistic and average resale prices drop (equity permitting) what will this do to the still over valued new builds?

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A similar topic is being discussed over on the main board. I thought it would be a good idea to talk about what we’re seeing here from a local perspective.

My brother is in the process of trying to trade up. He lives in the Ballymena area and is selling his large 3 bed semi. He’s a good few years older than I am but purchased around 2004. (so I think he would have little or no equity apart from my parents helping him out ). We had an interesting talk about this on Sunday. Now my brother comes from the “property double every 7 years” side of town. He has been visiting several EAs in the area. They have all been honest enough saying sales of second rung houses (ie detached, 4 bed) has been nonexistent. The said they are now mostly selling new builds, terrace and repossessions but still in no significant quantities.

What I want to know is, how do people her think this will effect the markets? With no trading up what will happen to the larger detached houses? Lets be honest there are plenty of them about. I personally think that what we will see is the gap between the different levels coming back down to reasonable levels.

BVI reports that sales are on the up and new builds are realistically priced having led the way on price reductions. If seller’s expectations become more realistic and average resale prices drop (equity permitting) what will this do to the still over valued new builds?

Firstly, if sales are up it is marginal and specific and unless more prices drop, won't last. Competitively priced newbuild (not all are), repos (reeds rains), and investors dross in council estates are all moving here, but at 2 or 3 units a month.

The 4 bed detached brigade are a different animal and I will generalise, so please humour me. This has been discussed before. The interest rates are saving many and they don't want to face reality - some, including developers, will cling on to the last second, then go bust to save face for as long as possible. Others i have seen move back with mummy and rent out - will not sell till 'market improves' - possibly even making a profit - high rent, low mortgage. The banks are changing mortgage terms to accommodate - longer term, IO - no need to sell. If forced to sell, some won't put a board up - too embarrasing - everyone knows they must be desperate to sell in this environment - all other things being equal. SMI gives you another 2 yrs.

It is much easier to accept that you are clever and your investment is increasing at 20% pa than to lose thousands each year. Many of your borrowing and lifestyle decisions will have been based on the rising price and equity of your property (your cleverness) and the cheap debt this has afforded you access to.

Death Debt and Divorce are the main drivers at the minute in the 4 bed detached and as well as the gap increasing to trade up, choice is restricted for the reasons given above. The big shake up is at the bottom, in renting and growing negative sentiment and realism.

The market is eating itself - crumbling at the foundations with the roof caving in. When people rent, many can't afford to save for a deposit at the same time and student debt is no help.

I have been thinking of trading up for 2 yrs - might not bother until some value returns in the middle. Inflation is doing what interest rates should. Then we will have IR rises anyway (Euro this week for a start). It's only a matter of time. Price reductions are accelerating here again. Nothing happened in the last 6 weeks, a couple of listings, a couple of drops and a few sales. The next leg down has started and will take off in Aug.

In NI, the average house is 7 times the average salary. Unemployment is rising. £4 Billion of cuts in the pipeline. It will get much worse, sooner, before it gets better.

But that's only my opinion. Don't let me put you off.

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Firstly, if sales are up it is marginal and specific and unless more prices drop, won't last. Competitively priced newbuild (not all are), repos (reeds rains), and investors dross in council estates are all moving here, but at 2 or 3 units a month.

The 4 bed detached brigade are a different animal and I will generalise, so please humour me. This has been discussed before. The interest rates are saving many and they don't want to face reality - some, including developers, will cling on to the last second, then go bust to save face for as long as possible. Others i have seen move back with mummy and rent out - will not sell till 'market improves' - possibly even making a profit - high rent, low mortgage. The banks are changing mortgage terms to accommodate - longer term, IO - no need to sell. If forced to sell, some won't put a board up - too embarrasing - everyone knows they must be desperate to sell in this environment - all other things being equal. SMI gives you another 2 yrs.

It is much easier to accept that you are clever and your investment is increasing at 20% pa than to lose thousands each year. Many of your borrowing and lifestyle decisions will have been based on the rising price and equity of your property (your cleverness) and the cheap debt this has afforded you access to.

Death Debt and Divorce are the main drivers at the minute in the 4 bed detached and as well as the gap increasing to trade up, choice is restricted for the reasons given above. The big shake up is at the bottom, in renting and growing negative sentiment and realism.

The market is eating itself - crumbling at the foundations with the roof caving in. When people rent, many can't afford to save for a deposit at the same time and student debt is no help.

I have been thinking of trading up for 2 yrs - might not bother until some value returns in the middle. Inflation is doing what interest rates should. Then we will have IR rises anyway (Euro this week for a start). It's only a matter of time. Price reductions are accelerating here again. Nothing happened in the last 6 weeks, a couple of listings, a couple of drops and a few sales. The next leg down has started and will take off in Aug.

In NI, the average house is 7 times the average salary. Unemployment is rising. £4 Billion of cuts in the pipeline. It will get much worse, sooner, before it gets better.

But that's only my opinion. Don't let me put you off.

I agree with everything you said. I was looking to hear opinions of where this section of the market was heading and the time scales involved. I'm trying to get my head around the fact we have such a large unproductive section of society, a high number working in the public sector and overall much smaller wages than England yet if you look at the various property sites and EAs then number of properties in the 200K plus bracket is staggering.

FTB age is now in the late 30s. When will these people get the chance to trade up? Do we really think the rabbit hutches built today will increase in value?

This is more of a sounding board for me. I’m just trying to really understand the VI argument for prices remaining the same or "bouncing along". Surely if FTB have to stretch the finances to the absolute max with crazy lending multiples in duel income households and average mortgage interest rates at 3% or so something major is going to have to give…

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This one of the most relevant (to me) threads that have been posted for some time. Like a few others I've been watching the local detached market with interest. From what I have observed, the detached market had lagged but has shown increasing signs of prices coming down to more realistic levels and the unwinding of the property bubble across all house types and areas is now very evident, even if sales are still as scarce as hens teeth. (The analysis now pinned at the top of the NI forum provided empirical evidence of this).

As I have previously suggested, unless there have been significant supply/demand changes over the past 10 years or so, I see no reason why all the rungs in the housing ladder with regard to both house type and geographical area should not eventually return to their relative positions in terms of % price differential. In general my view is there are just too many sellers hoping to get £250k plus for their standard 4 bed detached than there are buyers capable of raising the finance to purchase. At £500k plus, the number of potential buyers must be even more restricted, not many holding that amount of cash now you would think and what salary would you need to be on to get a mortgage for that amount? Yet £500k houses can be found for sale all over the province - who is going to be able to buy them?

If anything, my guess would be that detached houses could be less affordable here than they were 10 years once all the props have been kicked away. It would be interesting to look at the ONS wages data to see if the distribution curve has widened or narrowed in the tails which might support such a view.

So I think we are in for a slow but relentless drive down in detached asking prices until the relative market position on house types and locations are re-established. A catalyst, like rising interest rates or forbearance by the banks ending would likely bring about a more rapid re-alignment as many owners become confronted with the reality of their financial position.

For anyone able to do so, my advice for what it's worth would be to sit it out for another while to see what happens, but as Doccyboy suggests, be ready to move immediately once an opportunity presents itself.

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I agree with everything you said. I was looking to hear opinions of where this section of the market was heading and the time scales involved. I'm trying to get my head around the fact we have such a large unproductive section of society, a high number working in the public sector and overall much smaller wages than England yet if you look at the various property sites and EAs then number of properties in the 200K plus bracket is staggering.

FTB age is now in the late 30s. When will these people get the chance to trade up? Do we really think the rabbit hutches built today will increase in value?

This is more of a sounding board for me. I’m just trying to really understand the VI argument for prices remaining the same or "bouncing along". Surely if FTB have to stretch the finances to the absolute max with crazy lending multiples in duel income households and average mortgage interest rates at 3% or so something major is going to have to give…

I find it easier to say what I see and have seen and think some things need repeating, even on this site, as we tend to move to the next hot topic. I also have one eye on the casual reader, so sometimes generalise, and beyond the certainty of things getting worse, I am slightly hesitant to make predictions preferring to let others do that when the facts and trends are highlighted. When the Govt reduced interest rates to 300 yr lows and printed £200 Billion and pumped trillions into the banks, that to me was a shocker and means that nothing is off the table.

I know we both have the same outlook and that you are equally as well informed (or moreso) than myself, so in some ways you can answer your own question - certainly as well as I can. Yes something major has to give. Patience is key. Timing is the variable.

The only solid opinions I have, or wish to publicise, is that sentiment is taking a battering and will continue to do so and that the Govt. will continue to meddle (to the detriment of a 'free' market and realistic prices) but cannot defy gravity forever. Most of their bullets are, however, shot.

EAs have a major, major role in this circus and as yet are not playing their part fully, getting by on rentals and earlier profits - eschewing telling these people some hard truths. I don't know if they will 'get it'. But if and when they, and the RICS as a collective 'get it' and do something about it in respect of the '4 bed detached' then that will be the game changer. inflation, Interest rates, employment, vacant Rates are all slow burners at the moment, but inflation is hurting - make no mistake.

The man in the street, mostly, has got it. Banks have got it. The media have got it. Developers have got it. Many in their 4 bed detacheds have yet to 'get it'. They may not 'really' need to sell and EAs seem to humour them more than any other tier - a juicy and profitable segment in the good times - and they are all nice people, many of them repeat customers, on the way up the ladder :rolleyes: .

I concur fully with Doccyboys response, as I am sure you do. I, like you, am interested in other informed comment but can see little evedince for a scenario other than that which we have outlined and expect. Realistic EA may have an opinion and even someone a 'bit longer in the tooth', if they were honest, would make interesting reading.

Many also, of course want to sell at 07 prices and buy at 05 or 'need' to get ££££ because of A, B, or C. Many are just greedy. Same as it ever was.

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I know you are referring specifically to 4 bed detached but for me the catalyst lies with the middle market. When you refer to the middle market i.e 3/4 bed semi's this would be the most common type of home which the average family with 2.4 children tend to live in . This should prob be the busiest sector of the market because it is just that ... the 'middle' of most transactions for ppl upsizing and downsizing.

Those who have decided to sell up in the middle market look at the prices of the detached properties that they are most likely desiring a move to and they calculate 'what they feel they need to achieve' in order to make the next step up the ladder. What most fail to recognise is that the housing market is all relative - if they have to drop their house to sell it then the likely hood is that this same knock on effect would apply to the house they hope to buy at the upper end of the market.

Worrying, the gap between the lower end of the market and the middle market is just too big, prob just as big, if not more than what it was during the peak period. Therefore moving up the ladder will currently not appeal to most who are living in what is deemed to be the 'lower end of the market'. Especially when drops have taken the average price of these houses right down with the 50% drops from peak.

These (middle market) new developments which have thrown up many of these 3/4 bed semi's have houses with no storage space, shoebox gardens and apartment blocks surrounding them which remove any privacy. Despite what some may say they do not have the same appeal that they did during the last decade when ppl queued outside EA's to get them. These houses are barely any bigger than an old Housing Executive house (Which is primarily what FTBers of the past tended to buy) but yet the home owners/developers seem unwilling to accept that ppl have wised up and are not going to cripple themselves financially with extra borrowing for a house that is ultimately no bigger than the house that they currently occupy with perhaps a reasonably priced, affordable mortgage that they can maintain, or a house in the lower end of the market at a much lower price in todays market

The other area of the middle market i.e the older 3/4 bed semi's generally build around the 70's & 80's - vendors just need to get real. They expect to get more than new developments just because they have 'done the house up' over the years.

I put it purely down to mindsets, and perhaps snobbery at times that ppl in the middle market appear to be fighting against drops and burying their heads in the sand more than most but until they drop prices to a level that closes the gap between the lower end and themselves they will not sell their house. Once they do accept this and drop then they will solve the first problem of actually being able to sell their own home and the same concept should knock onto the higher end of the market who will have to follow suit if they want to acheive sales.

Edited by tinbin

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interesting topic. I do believe you are correct and the gap between semi detached and detached will drop to a level where people will say 'I might as well pay another £10k (or so) and go for a detached'.

On the market bouncing around I just look at what has been happening. The latest report, if we believe it, shows a 3% rise over the last quarter. Yes our volumes are 53% of what it was in 2007 (CML) but we need to look at the figures.

2008 volume collapsed to 8,400 sales

2009 volume increased to 10,000 sales

2010 volume held at 9,700 sales (all CML mortgage issued for house purchases (excludes cash sales)

Over the last year the percentage of buyers who the CML class as first time buyers has increased from 37% to 48%. The average FTB'er advance was £86k (83% LtV.)First-time buyers in Northern Ireland typically borrowed 3.21 times their income in the first quarter of 2011 slightly

less than the 3.43 of a year earlier.

Yes there has been a massive 46% (or so) drop from the crazy peek, but that can be divided roughly 40% in the first two years and 6% in the latter two.

Interest rates are at 300 year lows, but mortgage rates are not (apart from the few with life time trackers linked to BoE base [two of which I know so they exist]). A 5 year fix is about 3.8 to 4.5%. That is a little below the average for the last 15 years. It also tells me the lenders don't anticipate rates rising too much in that time-scale.

The big factor for me is rents. I am no expert on it, but people are, for the first time naming difficulty in getting a decent place to rent as there reason for buying. Over the last 4 years less than half the people who should have been buying rented instead (not sure is should is the correct word). Therefore the number of people renting has greatly increased and will increase more for some time. This will ultimately have a major effect and I believe it has started to impact on sentiment.

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I could go in today to one local estate agent where i live and expect to buy any one of 20 houses below the 120k asking price range which are listing with an asking price of below or around rateable value. Based on asking prices i see these houses selling for between rateable value minus 10 to 20%.

But when it comes to houses in the over £180k range i would have two hopes of getting any one of these house for less than 15-20% above rateable value. No hope and Bob Hope.

I agree with everything previously said. A falling market should be especially good for anyone trading up but only if the % fall in the house they are selling is similar to the % fall in the house they are hoping to buy but thats just not happening.

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interesting topic. I do believe you are correct and the gap between semi detached and detached will drop to a level where people will say 'I might as well pay another £10k (or so) and go for a detached'.

On the market bouncing around I just look at what has been happening. The latest report, if we believe it, shows a 3% rise over the last quarter. Yes our volumes are 53% of what it was in 2007 (CML) but we need to look at the figures.

2008 volume collapsed to 8,400 sales

2009 volume increased to 10,000 sales

2010 volume held at 9,700 sales (all CML mortgage issued for house purchases (excludes cash sales)

Over the last year the percentage of buyers who the CML class as first time buyers has increased from 37% to 48%. The average FTB'er advance was £86k (83% LtV.)First-time buyers in Northern Ireland typically borrowed 3.21 times their income in the first quarter of 2011 slightly

less than the 3.43 of a year earlier.

Yes there has been a massive 46% (or so) drop from the crazy peek, but that can be divided roughly 40% in the first two years and 6% in the latter two.

Interest rates are at 300 year lows, but mortgage rates are not (apart from the few with life time trackers linked to BoE base [two of which I know so they exist]). A 5 year fix is about 3.8 to 4.5%. That is a little below the average for the last 15 years. It also tells me the lenders don't anticipate rates rising too much in that time-scale.

The big factor for me is rents. I am no expert on it, but people are, for the first time naming difficulty in getting a decent place to rent as there reason for buying. Over the last 4 years less than half the people who should have been buying rented instead (not sure is should is the correct word). Therefore the number of people renting has greatly increased and will increase more for some time. This will ultimately have a major effect and I believe it has started to impact on sentiment.

The majority of the market are on trackers not fixed and the average rate is at its lowest level for 23 years (or around the average mortgage term) according to some.

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interesting topic. I do believe you are correct and the gap between semi detached and detached will drop to a level where people will say 'I might as well pay another £10k (or so) and go for a detached'.

On the market bouncing around I just look at what has been happening. The latest report, if we believe it, shows a 3% rise over the last quarter. Yes our volumes are 53% of what it was in 2007 (CML) but we need to look at the figures.

2008 volume collapsed to 8,400 sales

2009 volume increased to 10,000 sales

2010 volume held at 9,700 sales (all CML mortgage issued for house purchases (excludes cash sales)

Over the last year the percentage of buyers who the CML class as first time buyers has increased from 37% to 48%. The average FTB'er advance was £86k (83% LtV.)First-time buyers in Northern Ireland typically borrowed 3.21 times their income in the first quarter of 2011 slightly

less than the 3.43 of a year earlier.

Yes there has been a massive 46% (or so) drop from the crazy peek, but that can be divided roughly 40% in the first two years and 6% in the latter two.

Interest rates are at 300 year lows, but mortgage rates are not (apart from the few with life time trackers linked to BoE base [two of which I know so they exist]). A 5 year fix is about 3.8 to 4.5%. That is a little below the average for the last 15 years. It also tells me the lenders don't anticipate rates rising too much in that time-scale.

The big factor for me is rents. I am no expert on it, but people are, for the first time naming difficulty in getting a decent place to rent as there reason for buying. Over the last 4 years less than half the people who should have been buying rented instead (not sure is should is the correct word). Therefore the number of people renting has greatly increased and will increase more for some time. This will ultimately have a major effect and I believe it has started to impact on sentiment.

So 48% of the total market, which has halved, are FTBS and the mortgage is £86k (with 23% deposits of say £25k). Excuse the maths. Methinks getting your hands on a £25k deposit for a £110k house will be getting more difficult. Especially if you are renting @ £550 per month - even if you could save another £500 per month it would take you 5 yrs to get a deposit for a £110k house! I don't dispute the figures, but does 50% FTB make for a healthy market?

Certainly, sights have been lowered - many FTBs I know wouldn't be content with a £110k property, especially for what it would buy today.

Lenders didn't anticipate rate falls either, hence getting caught with their pants down on base rate trackers. Not much of a rate rise in the next 5 years is a little ambitious, I think.

I'm surprised the gap between a semi and a detached is just £10k.

People making a decision to buy based on a straight rent v mortgage £ calculation could be storing up difficulties due to all the other expenses of mortgaging a house and other variables (job security, IRs). Though rents can also vary. and many don't think, or care.

We'll just have to agree to disagree that prices have fallen 6% in the past 2 yrs. Can't get my head around that one at all, from what I have seen, I'm afraid.

Ex council houses here - £170k peak, £100k 2yrs ago, £55k now. Not comprehensive - just a snapshot.

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Agree with the last post totally. Several ex council houses in my area with prices well down from even a year ago. Typically rateable value of 80k with asking prices of 70K so i am thinking they will sell at around 60k.

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The majority of the market are on trackers not fixed and the average rate is at its lowest level for 23 years (or around the average mortgage term) according to some.

have you any links. Im not saying you are wrong I just wish to research it more.

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So 48% of the total market, which has halved, are FTBS and the mortgage is £86k (with 23% deposits of say £25k). Excuse the maths. Methinks getting your hands on a £25k deposit for a £110k house will be getting more difficult. Especially if you are renting @ £550 per month - even if you could save another £500 per month it would take you 5 yrs to get a deposit for a £110k house! I don't dispute the figures, but does 50% FTB make for a healthy market?

Certainly, sights have been lowered - many FTBs I know wouldn't be content with a £110k property, especially for what it would buy today.

Lenders didn't anticipate rate falls either, hence getting caught with their pants down on base rate trackers. Not much of a rate rise in the next 5 years is a little ambitious, I think.

I'm surprised the gap between a semi and a detached is just £10k.

People making a decision to buy based on a straight rent v mortgage £ calculation could be storing up difficulties due to all the other expenses of mortgaging a house and other variables (job security, IRs). Though rents can also vary. and many don't think, or care.

We'll just have to agree to disagree that prices have fallen 6% in the past 2 yrs. Can't get my head around that one at all, from what I have seen, I'm afraid.

Ex council houses here - £170k peak, £100k 2yrs ago, £55k now. Not comprehensive - just a snapshot.

First of all a high FTB'er market is a good thing. They had been bid out by the investor for long enough. It was not a healthy market without them. We have just completed (last month) two 100% loans. Northern bank. I do not welcome their return I believe people should be putting in at least 5%. If you rent the house you have to put down a deposit and I don't believe any bank should be looking at it differently. These purchasers were not top earners. However, those two aside we are seeing a good amount of 90% and 95% returning. This has been improving from last year.

I take the figures from the Nationwide. I try to give a health warning about the nationwide as they have a reduced market share in NI. However, I believe they have shown the biggest drop in prices and last quarter were down to £119k. I think that is the lowest amongst the main surveys, although the Halifax is not far away.

Their Peak price was recorded in Q3 2007 at £227k

This dropped dramatically to £136k, as recorded in Q2 2009 (not exactly 2 years)- a drop of 40.4%

As we know the price continued to drop, whilst bouncing up once of twice and settled Q2 2011 at £124k Roughly 46% down from peak.

The UUJ is 43% from peak but I am happy to go with the Nationwide 46% down.

As you can see the 46% drop has not been a straight line. The 46% can be accurately split 40% in roughly the first two years and a further 6%, or so in the latter two years.

I am quite sure there will be base rises in the next five years. One was expected later this year but pressure seams to be easing off for now. The base rate can double, treble and even quadrupole before it puts mush pressure on a 4.5% fix. The lenders give mortgages to make money. they have got it wrong before but all eyes are on this one now. They wouldn't be giving 4% fixed if they believed they would loose. There's a risk but they appear happy to take it when they are risk adverse on all other issues. Its only my opinion.

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First of all a high FTB'er market is a good thing. They had been bid out by the investor for long enough. It was not a healthy market without them. We have just completed (last month) two 100% loans. Northern bank. I do not welcome their return I believe people should be putting in at least 5%. If you rent the house you have to put down a deposit and I don't believe any bank should be looking at it differently. These purchasers were not top earners. However, those two aside we are seeing a good amount of 90% and 95% returning. This has been improving from last year.

I take the figures from the Nationwide. I try to give a health warning about the nationwide as they have a reduced market share in NI. However, I believe they have shown the biggest drop in prices and last quarter were down to £119k. I think that is the lowest amongst the main surveys, although the Halifax is not far away.

Their Peak price was recorded in Q3 2007 at £227k

This dropped dramatically to £136k, as recorded in Q2 2009 (not exactly 2 years)- a drop of 40.4%

As we know the price continued to drop, whilst bouncing up once of twice and settled Q2 2011 at £124k Roughly 46% down from peak.

The UUJ is 43% from peak but I am happy to go with the Nationwide 46% down.

As you can see the 46% drop has not been a straight line. The 46% can be accurately split 40% in roughly the first two years and a further 6%, or so in the latter two years.

I am quite sure there will be base rises in the next five years. One was expected later this year but pressure seams to be easing off for now. The base rate can double, treble and even quadrupole before it puts mush pressure on a 4.5% fix. The lenders give mortgages to make money. they have got it wrong before but all eyes are on this one now. They wouldn't be giving 4% fixed if they believed they would loose. There's a risk but they appear happy to take it when they are risk adverse on all other issues. Its only my opinion.

When i see UUJ stating 15% YOY drops to March and compare with the above, my head hurts. Perhaps its not comparing like with like. Which is the more comprehensive/authoratitave? Lets not go there again.

50% FTBs may be healthy, but are 50% of all props for sale FTB props ( in the usually accepted first rung of the ladder type). I suspect not, I also suspect this trend will leave a massive middle and top end overhang if it continues. Perhaps many newbuilds and even some well priced apartments, of which there is a glut (apartments - not well priced ones) are the new FTB fodder. Doesn't auger well for the resellers either lower or middle, if so. I don't know the overall situation so can only surmise.

Investors from what I can see are still about though much fewer. Many are offloading having been burnt and I wouldn't imagine too many from across the border are active, even though the Euro is relatively strong.

95% mortgages and 100% mortgages. The Northern Bank. In these economic conditions. I give up.

Edited by Shotoflight

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First of all a high FTB'er market is a good thing. They had been bid out by the investor for long enough. It was not a healthy market without them. We have just completed (last month) two 100% loans. Northern bank. I do not welcome their return I believe people should be putting in at least 5%. If you rent the house you have to put down a deposit and I don't believe any bank should be looking at it differently. These purchasers were not top earners. However, those two aside we are seeing a good amount of 90% and 95% returning. This has been improving from last year.

The return of FTBers to the market is a good thing, I would agree. But its a strange set of circumstances ... if approx 50% of all sales are first time buyers then this should trigger a chain reaction in the market. There is no evidence of that so for me it would suggest that they are purchasing repossessions or a large % of the vendors of the houses that they are buying are renting instead of buying further up the chain. The other point is that transaction levels are very much down on normal therefore 50% doesnt stack up for me as that big a figure.

By far the biggest activity in the Mortgage market is re-mortgaging applications. You regularly make the point that fixed rate mortgages are similar to what they have always been and that most take out fixed rate deals but I tend to disagree. There is a much higher precentage of Mortgages that are now on variable rates due to the record low int rates and only the top end of the most competitive fixed rate deals available a few years ago are anywhere similar to the fixed rate deals that are available now ... and believe me 1% can make a heck of a difference to a repayment mortgage at peak, and current levels.

The issue with MTG's given in the run up to and during the peak is that they should never have been sanctioned, ppl couldnt afford them but were given the loans even though they swallowed up around 80% of their disposable income in many cases. nobody cared ... sellers didnt care, developers didnt care ... banks didnt even seem to care. The issue is that these ppl HOPED that at the end of their 4/5 yr fixed deal that they would have been able to come out and get another EVEN BETTER fixed rate deal ... but what has happened, their equity is down, their MTG is being properly assessed and the new fixed rate deal that they expected to get is no longer on the table for them. These ppl have defaulted onto SVR which is around, if not less than the Fixed rate they had. Before the record low interest rates SVR was about on average 3% higher than what it currently is with the most competitive lenders/rates. For the local banks it was above 7%. for the Halifax it was around 6.5%. Now what happens when interest rates go back up??? These ppl are in trouble.

Im not sure if I have explained this the way that I see it but this is a point that I believe is missed time and time again by those with a VI ... why?? because its not something they have to care about.

Sometimes you have to look beyond facts and figures and look at the situation that ppl are actually in and how it came about.

Edited by tinbin

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When i see UUJ stating 15% YOY drops to March and compare with the above, my head hurts. Perhaps its not comparing like with like. Which is the more comprehensive/authoratitave? Lets not go there again.

50% FTBs may be healthy, but are 50% of all props for sale FTB props ( in the usually accepted first rung of the ladder type). I suspect not, I also suspect this trend will leave a massive middle and top end overhang if it continues. Perhaps many newbuilds and even some well priced apartments, of which there is a glut (apartments - not well priced ones) are the new FTB fodder. Doesn't auger well for the resellers either lower or middle, if so. I don't know the overall situation so can only surmise.

Investors from what I can see are still about though much fewer. Many are offloading having been burnt and I wouldn't imagine too many from across the border are active, even though the Euro is relatively strong.

95% mortgages and 100% mortgages. The Northern Bank. In these economic conditions. I give up.

Can do nothing about your sore head, I'm afraid. Reports differ, some lag a quarter others more up to date. The Nationwide has consistently offered a lower average price and greater % fall, so using it is by no means an attempt to hide the falls that have taken place.

Trying to understand your point. I believe the area of the market that is operating (if I may use that term) is the lower end. FTB'ers are purchasing most of the properties as they are chain free and are not having to hold out for a price that gives them the equity they need to move up. So you will see a flattening of the market as such as the top prices come down faster than the lower end. The can will shorten, which is needed to allow people to start to move up again.

Investors haven't been around since the crash started and I don't expect them back any time soon. two 100% mortgages do not mean the flood gates are open. Like you I do not wish to see them and only hope they are giving them to people who don't need them. The L2V is increasing.

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Just thought I would add. I had a talk with my business account manager at northern today about their 100% mortgages. He tells me they are the only UK bank offering them and they require a parental guarantee. So the BOMAD may not be lending money for a deposit (they have probably ran out) but they will guarantee any shortfalls in your mortgage payments. You’re right VI very healthy market for FTBer at the mo… :blink:

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Just thought I would add. I had a talk with my business account manager at northern today about their 100% mortgages. He tells me they are the only UK bank offering them and they require a parental guarantee. So the BOMAD may not be lending money for a deposit (they have probably ran out) but they will guarantee any shortfalls in your mortgage payments. You’re right VI very healthy market for FTBer at the mo… :blink:

As I said in my post I don't welcome 100% mortgages, even 95% is probably too high. I am happy with 90% and their availability has been increasing.

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  • 312 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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